Note: OT OT no politics in this post.
LB, are you aware that EDSN has rebounded to $1.64? Are you aware that Whittle, along with other insiders, has told the board that he is interested in making an offer for a LBO to take the company private? Did you notice the little note at the end of the show that confirmed that it will likely be taken private? Are you aware that at least one financial institution has, (reportedly) shown an interest in providing financing? Are you aware that TC2000 shows significant positive money flow into the stock for the last 2 months, since the announcement of buyout interest was made on May 8th? Are you aware that EDSN will likely show a profit of $25 million or so for the 4th quarter (not full year, just 4th quarter) of fiscal year 2003, that just ended on 6/30/2003? Are you aware that there are only about 55 million shares outstanding, and that EDSN has revenues of well over 400 million annually? Are you aware of their revenue growth record since they were founded? Have you visited the EDSN website to check their 10-point program for their schools? Are you aware that their record of improving test scores compares more than favorably with the improvements recorded in publicly operated schools, with an overall school enrollment with 80%+ minority and/or lower-income students? Are you aware that the Chester, PA schools, in the district reported on the program as having the "poorest school district in the state", posted "strong and consistent overall average [SAT] gains from spring 2002 to spring 2003." Are you aware that total shareholder equity was $202 million, or $3.82/share at the end of the 3rd quarter? Are you aware that parents, in the majority of the schools that they operate, are very pro-Edison, according to the company? Did you notice that the show gave NO publicity to the test score improvements that have been shown in the schools that they operate?
The teachers unions have been pretty successful in attacking this company and causing the impression in the media that they have failed.
Edison needs growth in the number of managed schools in order to make economies of scale work, yet at the moment they have been forced to slow down their growth and consolidate in order to conserve cash.
IMO Whittle has not "basically failed". My guess is that an LBO, if it occurs, would come at a price well over $2/share. And if it doesn't occur, and the company continues to operate, I believe they will succeed. Color me biased, and color me naive, but if you are willing to cut a loss quick, I think this stock has absolutely huge upside potential. The stock seems to have made a floor at around 1.50, and my plan as a holder is to bail if it breaks 1.40.
Full disclosure: In case you hadn't guessed, I am long a lot of EDSN, some from $1.80, but much more from far lower prices that the stock currently sells for.
And I never heard of the company before last October. |
