Dominic DeGrazier 3:37 p.m., Sept. 21
Stocks of For-Profit Colleges Zoom on Rumors
Stocks of for-profit colleges, which have been hit hard of late, are soaring today on rumors that the Department of Education won't be as restrictive on student aid eligibility as earlier expected. Analyst Trace Urdan of Signal Hill predicted that the DOE would not be as harsh as anticipated. Apparently, speculators shorting the stocks (betting they would go down) rushed to cover their shorts by buying shares. Half an hour before today's (July 19) close, San Diego's Bridgepoint Education is up 8.6% to $17.05; Apollo Group (University of Phoenix) is up 5.29%, Corinthian Colleges up 8.71% and Education Management up 11.55%. Bridgepoint students get about 85% of their financing from federal programs. Bridgepoint is also under DOE investigation for alleged dubious sales practices.