K12 plunges on concerns about Colorado school


K12 (LRN) is tumbling after Wells Fargo analyst Trace Urdan downgraded the stock to Market Perform from Outperform in a note to investors this morning. One of the company's schools, Colorado Virtual Academy, is performing poorly, Urdan wrote. In fact, the school's weak results have become a problem for the school district in which it is currently charted, according to the analyst. In a press release issued this afternoon, K12 stated that it "has been working for some time with Colorado Virtual Academy's...board to address performance issues" at the school. The issues arose "from the school's changing demographics and the influx of academically at-risk students," K12 stated. A team is currently making "significant improvements" to the school, K12 added. In mid-afternoon trading after the company's press release, K12 shares remained down $3.33, or 16.28%, at $17.12.

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