Bridgepoint Stock Leaps on Huge Profit Gain

Bridgepoint Education, the controversial for-profit education institution, enjoyed a stock gain of 8.1% to $19.87 today (May 3) as first quarter profits leaped 81% to 92 cents a share. Sales climbed 47% to $229.4 million. Earnings per share will be $2.47 to $2.57 this year. Analysts had predicted $2.26. Bridgepoint has been under Department of Education investigation for possible violations of recruiting rules, among many things. The company makes almost all its money from federal grants and loans, but has a staggering dropout rate.

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Time to short Bridgepoint stock? I would, except I long ago vowed to never short a stock again after I lost a bundle.

I wouldn't short Bridgepoint. It has a higher percentage of shares short than any stock, last time I looked -- something over 50%. All it needs is some good news and the shorts would run to cover, sending the stock skyward. That may have happened today. I think gamblers might be smart to go long on this stock. I have nothing good to say about the company, but the stock could be good for speculators partly because there are so many shorts out there. Best, Don Bauder

No thanks. To succeed would require a very accurate sense of timing--when to get in, when to get out, especially the latter. Hard to do, and if you miss, you lose big.

I do not short. Too risky. I personally would not gamble on a stock like Bridgepoint, either. I'm just saying -- and I said it in a column a couple of months ago -- that Bridgepoint, even though the company is essentially a boiler room being pursued by the Department of Education, could be a good stock for gamblers. Best, Don Bauder

Why no comments about the actual Education the students may or may not be receiving?

Is there going to be a story about the success or failure of the students?

I have written more than once that 84% of students at Bridgepoint's Ashford University (which accounts for almost all of its students) drop out before graduating, and 62% of four-year students drop out. Does that answer your question? Best, Don Bauder

NOTE: That's 84% of two-year students at Ashford. Best, Don Bauder

Why no comments about the actual Education the students may or may not be receiving?

================= Don has covered this issue exetnsively, the "education" the students receive, or at least the 10% who can hang in, is not worth the paper it is printed on.

The failure rate is close to 90%, hard to get much worse.

Keep in mind that Bridgepoint made its money off the grants and loans given the dropouts. Now there is a proposal, called "gainful employment," that ties access to federal student loans and grants to former students' incomes and loan-repayment rates. This week, the proposal by the Department of Education went to the White House for its consideration. If the president thwarts this eminently sensible initiative, watch for the for-profit stocks, particularly Bridgepoint, to soar. Best, Don Bauder

One of our local congressmen, Duncan D. Hunter, the combat veteran came to the defense of Bridgepoint and Ashford. He gives them credit for making education available to those who might not have otherwise been able to get it. I'd hope that he is more astute in his appraisals of other things. One success story out of one hundred or one thousand attempts doesn't cut it.

Duncan D. Hunter, the combat veteran came to the defense of Bridgepoint and Ashford. He gives them credit for making education available to those who might not have otherwise been able to get it.

If he actually said that then he is in their pocket-they are paying him off. No other reason. Plus the only reason Hunter is even in the Congress is because of Daddy. What does he know?? Nothing.

There is NO justification for 84% of their students failing, I don't care who they make their useless, good for nothing "education" availible to.

Making your education available to people who cannot benefit from it or pay for it, through taxpayer backed student loans, is fraud.

If Bridgepoint wants to carry their own commecial paper for their uselss education then I don't care what they do, but when they scam the poor for federal student loan money that cannot be paid back then I am going to call them on it, and call them HARD.

Bridgepoint admits to getting 85% of its revenue from federal grants and loans to students. But it is probably close to 100%, because the company's military recruits don't count in that 85% number. Bridgepoint for years has been basically a boiler room, recruiting students who have no business going to college through hard-sell techniques. And the money for this activity is coming from taxpayers. Best, Don Bauder

Duncan D. Hunter being "astute?" C'mon, Visduh, you know better. The Republicans, who boast that they will do something about deficits, want to let these for-profit universities off the hook, even as the student loan debacle escalates and escalates, greatly worsening the nation's financial situation. Some say the student loan crisis could be almost as bad as the subprime loan crisis. The for-profits are spending heavily on lobbying. Best, Don Bauder

The Republicans, who boast that they will do something about deficits, want to let these for-profit universities off the hook, even as the student loan debacle escalates and escalates, greatly worsening the nation's financial situation

I think I have mentioned I was involved in a major student loan case, that included suing the Secretary of Education Under Bush-Margaret Spelling-the entire DoE under Bush, and even under Obama, is nothing more than a revolving door between the regulators and the ones they regulate-writing their own rules. It is gigantic cabal of profit for student loan scammers like Sallie Mae, NelNet, the Bridgepoints and tons of other "educational" schools-both for profit and non profit. The so called non-profits would make your head spin at some of the compensation and spending practices.

The default rate is over 50% at MANY HBCU's, and over 30%-40% in ALL schools when using a total (all loans over entire repayment period) default rate.

A large % of student loans made for law schools will never be paid back, ever. The jobs are non existant (yet the ABA keeps approving new law schools) and the average pay rate is in the $40K range for a 60 hour work week (if you can find a job) with no benefits. The average debt is $100K+.

In fact here is a GREAT story about education and gov jobs that came out a few days ago;

"California Prison Academy: Better Than a Harvard Degree"

Prison guards can retire at the age of 55 and earn 85% of their final year's salary for the rest of their lives. They also continue to receive medical benefits.

. http://online.wsj.com/article/SB10001424052748704132204576285471510530398.html .

What you ably describe -- a revolving door in which the regulators get jobs with those they regulate -- is a sorry phenomenon that is pervasive in U.S. government. The SEC is a classic example: the big Wall Street law firms control the SEC through the revolving door system. It's also true in other government entities: DOJ, FCC, FTC, etc. You learn the ropes at taxpayer expense, then take a job defending the crooks you were chasing. Your knowledge of backstairs politics in the regulating agencies helps you keep your crooked clients out of prison -- often keeping them from paying a hefty fine. The big dropout rates at the for-profit colleges such as Bridgepoint's Ashford, and the monstrous student loan default rate, should wake up politicians. Don't count on it. The for-profits doubled lobbying expenses last year to $6.6 million in an effort to defeat the "gainful employment" rules Washington is considering, according to Bloomberg News.

What you ably describe -- a revolving door in which the regulators get jobs with those they regulate -- is a sorry phenomenon that is pervasive in U.S. government. The SEC is a classic example: the big Wall Street law firms control the SEC through the revolving door system.

The practice should be banned, bit won't, too much $$$ greasing the system.

No employment for 5 years in an industry you regulated once you leave high a level gov regulator position/s.

San Diego has tried similar deterrents, but much less time than 5 years. But it hasn't worked. Remember Sunroad? Best, Don Bauder

NOTE: BRIDGEPOINT SPENDING HEAVILY FOR CORPORATE ADVERTISING: The ethically challenged but financially unchallenged Bridgepoint Education is spending heavily for corporate advertising. It is running ads in publications such as the North County Times boasting how it provides jobs and makes $1 million in charitable donations in San Diego. The ad shows Bridgepoint giving a $60,000 check to Promise 2 Kids. Susan Golding, former mayor of San Diego, heads that organization. Best, Don Bauder

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