Wow!

The sell-off here is really momentous. (note that this chart self-updates, so you’ll have to keep its Aug 20 price of $4.5 in mind). We have a feeling this will correct, it’s priced like its whole business model is gone down the drain, which seems excessive to us..

For now, we’re merely noticing it, we’ll get back to it. The company is in the education business and experiencing some problems:

• It missed earnings by a fraction
• Defaults on student loans are up
• As a result of that, it is accepting less student enrolment, leading to a 6% reduced 2011 revenue guidance (in the cc)
• There are regulatory worries

But is that enough to explain this mother of all sell-off’s?? It seems like the wholesale destruction of it’s business model is being priced in..

Here are some perspectives:

• RPT-UPDATE 3-Corinthian profit misses, shares slump on aid woes
• Rule changes cloud Corinthian’s outlook
• For-profit education stocks plunge