Thursday, June 02, 2011

Wake me up when pets.com hits $300

So let's ignore the fact that basically everyone that couldn't get into the LinkedIn IPO has booked a loss at this point (the rumor is that almost all of the shares sold at $45 went to a select handful of clients) -- it's bubble on in the internet space as both Groupon and Pandora (the internet radio company) filed to go public.

Pandora seems to be growing revenues (about doubled in the last year) but their costs are also exploding. Nice combination.

The best quotes I saw on Groupon today included "No one that read the Groupon IPO filing would ever invest in this stock" and "More than 50% of Groupon's staff is sales. Can anyone other than Herbalife top that?".
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Hmm, the top five performing stocks today - Education Mgt, ITT Education, Strayer Education, Devry and Apollo Group - all have something in common. They were up 10-20% today and they all make money granting practically worthless degrees (okay, that's my opinion) to people in the FOR PROFIT EDUCATION MARKET.

What would make them jump so much in a single day? Well, today the Department of Education decided that they would set a new standard for the for profit colleges. In order to keep living high off student loans financed principally by government tax dollars, these schools will need to make sure that at least 35% of their students are current on their loans. HUH? That's the bar for success? As long as only 64.9% of students default it proves the validity of your program and you can keep milking the taxpayers and students?

This is the sort of nonsense that makes me head hurt.

Fact of the day to ponder: Yahoo Finance reports that students at for-profit institutions represent just 12 percent of all higher education students but 46 percent of all student loan dollars in default.
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* The new catch phrase in real estate "It's a catfish recovery (lots of bottom feeders)".

* "MRSA superbug found in milk in the UK. Consuming dairy not a worry." Yeah, I think I'll let you test that theory first.

Cheers!


Watch for jobs numbers in the morning. The consensus is falling (probably around 140k by tomorrow), but I'll take the over even though I think it will be a strong headline with weak supporting data.

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