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ITT Educational Services Inc. Message Board

thedeathrace 20 posts  |  Last Activity: Sep 10, 2014 10:13 AM Member since: Jan 10, 2013
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  • Reply to

    Apple Pay is the end of AMZN's growth

    by thedeathrace Sep 10, 2014 10:10 AM
    thedeathrace thedeathrace Sep 10, 2014 10:13 AM Flag

    The above degradation to AMZN's business will take time as the iPhone6 and Apple Pay is only now coming out. But the trend will be clear in the next 12-24 months. I suspect that the smart money will start to figure it out and AMZN's shares will find it harder to make any big up move that holds very long. The die-hards will no doubt make serious attempts to bull up AMZN share price, but in the end, they will all cave in and the short sellers will take charge.

  • AMZN does its business only as a matter of low prices (in part from no sales taxes in the past) and convenience (eg one click). Apple Pay changes all of that. Now everyone will have the convenience of "one click" with their iPhone. Also, why do I need to go to the AMZN web site to buy anything when I can just go direct to the manufacturer and get their "direct" low price and execute the transaction with just one click. And the transaction is secure and I do not need to worry about AMZN using my personal information. Every retailer and manufacturer who sells on the web will enable Apple Pay. This is a killer for AMZN, PayPal and others.

    With this in mind, it is no surprise why Bezos felt it an absolute necessity to build his own smart phone so that customers could shop on AMZN. The problem is that he is too late and an AMZN specific phone is not what people want. Users want flexibility and functionality and the AMZN Fire has none of either. AMZN knows what is coming down the pike and they are more than concerned enough to spend all that time and money on trying to build a smartphone.

  • Reply to

    ESI has been in the education 60 years!

    by thedeathrace Aug 6, 2014 1:22 PM
    thedeathrace thedeathrace Aug 6, 2014 1:50 PM Flag

    You bring up an interesting point. Harvard has more applicants than places, so they can be selective. If they did not have as many applicants as places, would they admit everyone who wanted an education? If they were not to admit everyone when they had room for them, how would they decide who could be successful versus who could not. This is very tough question when someone wants to pursue further education and may not be the most qualified person out there. Do you say "no" to these people or give them a shot? If you think that the person has a shot of completing the coursework, not sure how you say "no" to that person. If the applicant is basically brain dead, the answer should clearly be "no". I think that all education companies have entry tests, even the for profit companies. But I am no expert in this area.

  • Reply to

    shorting as we go..I am looking for ZERO

    by checking_here Aug 6, 2014 1:12 PM
    thedeathrace thedeathrace Aug 6, 2014 1:41 PM Flag

    hilarious.."shorting as we go"???? stock can not be shorted anymore. No shares available to borrow. Too funny. What a clown.

  • ESI has been providing education services for 60 years. This is not some new fly-by-night operator. They have a very very long track record and history and have been providing services for a very long time. Now I have no issue with people complaining that tuition costs are expensive and have risen faster than the rate of inflation. And the job market is tough so getting educated does not mean that it is a ticket to a guaranteed job. There are no guarantees to anything. You can have a law, medical, accounting degree and not be able to find a job, not just a computer specialist. The tuition cost thing has been addressed at ESI. That is old news. The politicians can #$%$ and moan, but the problem is that they have done nothing to promote job growth in the US. How about some major tax breaks for hiring new employees. How about a law that provides lower tax rate for new young people in the workforce that have student loans above a certain amount. How about giving companies a tax credit when they hire a new worker. And so on. The politicians are not doing theiir jobs and the education companies are an easy target. At least when I buy a car with zero money down, I can drive around and look like a big shot. Buy an education with zero money down and the value is what is between your ears. Which is worth more....the fancy car that loses half its value the moment you drive it off the lot or an education that can last a lifetime. Why are the politicians now #$%$ about ESI after the company has been around for 60 years? 60 years!!!!! The answer is simple. The shorts have paid them off, they can trade on inside information and make money in their personal accounts, and the education companies are easy political targets. I have not heard ONE WORD from politicians or short sellers about any community college or non for profit private school. Not a word about the quality of those educations. Not a word about their tuitions.

  • thedeathrace thedeathrace Aug 6, 2014 12:50 PM Flag

    I am not a basher at all. IN fact, I think that the shares are potentially hugely undervalued. I would say this. ESI has to get its act together fast. They need to do the following...

    1. Get the restated financials prepared. The new financials will show the PEAKS guarantee obligations as new debt (probably short term debt.

    2. All the financing to pay off the PEAKs guarantee obligations has to be put in place. This may include closing a new real estate deal.

    3. A top notch solid CEO must be hired.

    4. Any outstanding Dept of Education issues, eg not having filed up to date financials, must be taken care of.

  • All this blabbing about student loans and education. I could care less what the short sellers say on this front.

    Getting and education pays off hugely. No education and you life will most probably end up really #$%$. Get and education and you get better jobs, are less unemployed, can pursue a career, and so on.

    It ain't cheap, but it is worth every dime. People spend $1,000 - $2,000 on home television systems with dvds, tivo, huge flat screens etc etc. Spend $15,000 - $20,000 for an education. No way??? Education is without question worth more than 7-10 home television systems. Funny comparison.

    So many people want something for free. Put zero money down, get a tv, a new car, even a house. You don't pay in the end, the man comes and takes your toys away. If you do this with and education, they can't take it away from you. So I think many people defaulting on a student loan looks see it as an ok move - they borrowed the money upfront and didn't put a dime in themselves. But defaulting is a low rent move. Not paying puts pressure on the education system and in effect punishes the next guy. It is like not paying your hospital bill. There is no money to the hospital and thus patient care suffers for the next person through the door.

    The student loan program is a good program as very very few people have the money to pay for the costs that are required for a vendor to deliver an education product to the marketplace, regardless of for-profit or not for profit. Providing education services is not easy. It is expensive. The regulations are enormous. Teachers cost a ton of money. And so on. There is no free lunch. But it has now become the American way - everyone wants to get it for free and have someone else pay.

  • thedeathrace thedeathrace Aug 6, 2014 12:10 PM Flag

    3. Industry and ESI enrollment numbers are down. This has made for a declining earnings profile. SO the shorts figure that the business weakness continues to play into their hands, regardless of valuation. No pressure to cover the short position unless enrollments stabilize or improve.

    4. ESI needs to get the PEAKS guanantee obligations cleaned up. This is going to cost money - around $200 million, and ESI has said that it has the money to do this. But hte shorts are happy that the issue has not been resolved yet, so no need to cover a short positon on htat front.

    5. Shorts think that the Department of ED may get nasty with ESI re the student loan situation, like what happened to COCO. For sure,the shorts are pushing hard for this with the politicians that have been bought off.

    6. The shorts feel completely in control of the fundamentals and the share price by means of their political hacks and the control of the press related to the education companies. As long as you feel in control, why cover.

    That's my 2 cents.

  • One question to ask is why are the shorts so aggressive on ESI? They all know that the short interest is beyond gigantic. SO here are my thoughts.

    1. Shorts are clearly no worried about a squeeze in which there stock gets "called in". I am not talking about a share price run up. A price run up just chases out the weak short sellers. I am taking about a legitimate squeeze where the stock loan clerk calls up the short seller and says we have no stock to lend anymore so you are being bought in on your position. There have been no buy-ins at all in ESI. Why? Becasue the shares are held by large institutions that routinely lend out their shares in all their holdings as part of their ongoing overall business. To force a buy-in, the long holders must ask that their holdings be moved from their margin accounts to their cash accounts. This is clearly not happening and I do not expect it to.

    2. The shorts have clearly paid off Senator Harkin who chairs the senate committee covering education. The senator whenever he publishes any report always makes ESI a major focus, when there are many other education companies (both public and private) that are much more worthy of attention. The recent sham report from Harkin about education and US veterans is a case in point. Harkin's report provided a hugely slanted viewpoint and at least ESI came out with a statement showing how Harkin's snide comments re ESI were off base. For instance, Harkin commented extensively how for profit tuition are higher than public college tuition. He failed conveniently to mention that public college tuitions are hugely subsidized by the taxpayer and the students get loans there too. The for profit companies get no ttition subsidy. In addition, the for profit tuitions are below those charged by the private school competitors. This is in his report in the data tables, but he sure forgets to mention it. Anyway, Harkin and the politicians are in the back pocket of the hedge funds.

  • Reply to

    College Portfolio Buyer -- No exist

    by jimmy_sam001 Aug 5, 2014 10:28 PM
    thedeathrace thedeathrace Aug 6, 2014 11:21 AM Flag

    My thoughts on this whole thing is that the "College Buyer: is just a shill for the short sellers who want to screw around with ESI by getting insider information on the company from the due diligence process on the real estate. the college real estate buyer had already asked for one lengthy extension of the due diligence process and was now asking for yet another extension. The buyer was misrepresenting themselves and after stringing ESI along for several months, ESI finally figured it out. While the situation is unfortunate, the board clearly got tired of the CEO Modany getting pushed around and manipulated and outmaneuvered by the short sellers, so the board gave him the boot. Good riddance. Now we can get a decent CEO.

  • Reply to

    I have to give the shorts credit

    by johnnyporkchop2000 Aug 5, 2014 11:53 AM
    thedeathrace thedeathrace Aug 5, 2014 12:17 PM Flag

    I agree. SHorts have been controlling this stock and the situation for some time.

    Shorts have Senator Harkin in their back pocket bigtime. But he is leaving office this year. The shorts are no doubt working on greasing his replacement already in advance. Harkin just keeps putting out negative stuff on the sector but always #$%$ on ESI in particular, but not the other companies so much. It is clear that Harkin has been trading on inside information himself and getting paid off be the hedge funds who are short ESI.

    Shorts also set up this fake real estate bidder for the ESI property sale/leaseback so that they could sidetrack ESI and also get a closer (insider non public information) look at the company's real estate assets during the bogus "due diligence" process. Then the phony buyer got smelled out by ESI and ESI told them to hit the road.

    The shorts are always a really nasty bunch. They don't care about anything other than driving down a stock price. There are no lengths too far or behavior too immoral that these people will go.

  • Reply to

    Why Amazon could be the next Enron

    by etbob1 Aug 1, 2014 10:07 AM
    thedeathrace thedeathrace Aug 1, 2014 11:05 AM Flag

    AMZN has indeed been given a huge hall pass for its lack of profits. There were reasons for this: AMZN revenues were growing faster than any other major retailer (especially WMT), the company kept on saying the opportunity ahead of it was huge (and therefore it had to make investments to capture that opportunity), and the company had the new internet co-location server business which was growing at huge rates. Well, now we are at $90 billion in sales and still no profits. How much in revenues do you need to capture in terms of "opportunity" in order to make money. Ask Facebook or Microsoft or Google about how much they had in profits on a fraction of that revenue level. So, let's face it. There is no revenue level at which AMZN makes profit. They sell products at cost. Selling at cost means that you capture market share from those who have to price with some margin for profit. Problem is that you never make money. If you never make money, your business is worthless. Furthermore, the state lases tax avoidance subsidy for AMZN is now gone. Add to that, the internet colocation server business is under a huge price attack from MSFT, IBM and GOOG. AMZN's profits from this activity are now going nowhere but down. Let's throw on top of all of that a bunch of bogus PR on the lame drone delivery stuff and then a ridiculous new smartphone that no one wants and is years late to the market and going up against the toughest players in the world. The Kindle did real well too - less than 1% market share in the tablet space. Let's call it AMZN's "dumb phone".

    The AMZN party is over and the stock price action tells the story.

  • The tax burden on shareholders on this deal is outrageaous. Vote no on this deal.

  • Reply to

    Official comment from Abbvie

    by focuson401k Jul 22, 2014 12:37 PM
    thedeathrace thedeathrace Aug 1, 2014 10:05 AM Flag

    This Shire tax inversion deal is a nightmare. Taxable shareholders will all have to pay gains taxes even without having sold their shares. As a long term shareholder with a large unrealized capital gain, I am outraged. I have to pay 35% to the Feds and another 10% to New York State. 45% haircut. There is no way that the company can make this up to me in terms of the share price rising because of this deal. It is a huge money loser.

    And guess what. Management has structured the deal so that ABBV will pay ALL of their own personal taxes that result from the deal. It is pathetic.

    I am voting against this deal.

  • Reply to

    CLF to announce double revenue Q1+Q2

    by royengr Jul 15, 2014 10:44 AM
    thedeathrace thedeathrace Jul 15, 2014 11:33 AM Flag

    this is not correct as I see it. IF a company produces something or manufactures a product and expenses on the income statement all the cost for such in a prior period and then the product is held in inventory (at the cost of manufacture) for sale in a later period, when the product is sold the company reports revenue (the inventory amount ( =cost to manufacture) plus the markup (gross profit). There is no associated cost item to be booked as the costs were already expensed on the income statement. The total inventory amount and markup becomes profit. The prior period's expenses are extra large and profit is understated. The subsequent period's revenues are extra large and the profit is overstated. The combination of the two periods results is the normal picture.

  • Reply to

    CLF to announce double revenue Q1+Q2

    by royengr Jul 15, 2014 10:44 AM
    thedeathrace thedeathrace Jul 15, 2014 11:25 AM Flag

    Well, CLF's stock for the past couple of years has sunk just like the Edmund Fitzgerald. But like that ship, I think it has finally hit bottom.

  • I have read some posts here recently that indicate that CASA was short CLF shares. Some posts indicate that CASA Is covering their short position.

    How does anyone know this? Was there some SEC filing indicating that CASA had shorted CLF shares?

  • thedeathrace thedeathrace Jun 26, 2014 4:42 PM Flag

    No one is betting on Cassablanca being successful. CLF share price has gotten crushed, so who has been going along with Cassablanca? No one that I can tell or have read about. I don't hear a peep out of any other activists piling into CLF - like Paulson just did with Allergan. So if Cassablanca fails, it is a non-event. CLF share price is crushed enough that no one cares if Cassablanca sells their 5% stake. That 5% stake is basically a $100 million investment in a company with a $6.8 billion stockholder's equity (although I expect another write down to be coming, taking shareholder equity down by about $1 billion). Either way, Cassablanca's stake is peanuts. If Cassablanca bails, short sellers will use it to cover some of their massive short position.

  • Despite all the gnashing of teeth regarding the movement in CLF's stock price, CLF does have some "inherent value". This would be the Warren Buffett approach. If anyone here were to buy 100% of CLF, what price would you pay? We have the US iron ore biz, the US coal business, the Canadian Bloom Lake reserves, and the Asia iron ore business. Each of these are worth something for sure. Certainly what CLF paid for Bloom Lake was over the top (almost $5 bill, plus another $1.5 bill in cap expenditures, less the $1 billion write down the company took on it last year). But Bloom Lake is not worthless. It has huge reserves. CLF also has other assets, such as equipment and inventories. It also has $3 billion in debt. Funny thing is that if Bloom Lake had held a value of lets say $3.5 bill (which may be high), that alone would cover the value of the company debt. What the other stuff is worth is worthy of discussion here. Who has any thoughts. Cassablanca has clearly thought about it, but they have not thrown a number out there.

    Regarding iron ore prices, i see that in 2012 they fell into the $90's and then rose almost to $150. So here we are back in the $90's. Why shouldn't prices recover as before. Of course everyone thinks that China is falling off a the end of the earth, but we have all heard that story before and they just keep marching on. Commodity prices go up and down hugely all the time. So why is this downdraft no different. Why would anyone ever sell out of a natural resource asset with the commodity price at the low. CLF management has a point in their response to Cassablanca in this regard. I think selling out here at these depressed commodity price levels in probably a bad move. Some will say of course that commodity prices are going lower. But let's face it. Who has ever been able to correctly predict any future commodity price consistently. No one has. So listening to the commodity price bears is of no value in my opinion.

  • Why VLO and other refiner stocks are down is beyond me. This news from the morning was a total non-event. Now the news has been discredited.

    Looks to me like it is just the day traders pushing the stock around and the market makers being too scared to do anything to support the stock.

    What I don't often understand in the marketplace is who sells a stock like this with the price down 10% on such ridiculous news. But here we have it. Shares down 10% and there have been sellers. Why sell something for 10% less than what is was worth yesterday when the news is just so flimsy and of no effect.

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