Stoney is LRN a buy? Kudos to you Stoney for catching the Nuclear power trade before the hedge funds! “ Stride Inc (LRN) – The Last Covid Over Earner – Hiding That Est >25% of EBITDA Came from Covid Funds by Fuzzy Panda Research in Stride Covid Windfall is GONE! – Funds Expired Sept 2024 – EBITDA Cliff Coming Mgmt. Hid That Schools Received >$330mm in Revenue from Covid Funds Discovered That Fake “Ghost Students” Account for Large % of Enrollment Undisclosed Churn – Schools are Leaving We are short Stride Inc (fka K12 Inc.) (NYSE:LRN). We believe Stride, a K-12 online education company, is the last Covid over-earning stock yet to fall. The stock is near its highs (+60% YoY) but investors are clueless about the looming Covid funding cliff. Investors don’t know because Stride management has NOT told them. Instead, management has said over and over again that the company received little to no benefit from the $190 Billion of federal Covid funds (called Elementary & Secondary School Emergency Relief Funds, or “ESSER”). Former Stride executives told us that management misled investors. “That ESSER money was kind of like a windfall … [Stride] swept all that money” ~Former Senior Stride Executive We spent hundreds of hours of collecting publicly available school data that confirmed Covid ESSER funds were a windfall for Stride from 2020-2024. We discovered that Stride schools received >$330 million of revenue from Covid (ESSER) funds, and much of that flowed to the corporate bottom line. Former executives told us Stride captured abnormally high margins of the Covid funds (ESSER) because there were few specific requirements on how they could be spent. The executives estimated the funds flowed through to Stride’s bottom line at supernormal rates estimated of between 50-75%. We estimate that ESSER Covid funds accounted for >25% of EBITDA! As of September 30, 2024 those funds have expired.We believe Stride’s EBIDTA is set to Fall Off a Covid Cliff. Stride is currently trading at peak everything. Peak EBITDA, Peak Multiple, and near its Peak Stock Price. Investors don’t know that on the other side of that peak lays a Covid Cliff! Background: Stride was a sleepy company no growth for a decade, Covid hit. Growth ensued and, boom EBITDA almost doubled, we’ll show you why that’s set to not only end but reverse. We are short Stride because: We pulled the data school by school & uncovered Stride Schools got >$300 million revenue from Covid funds. Management has hidden that their schools received a huge benefit from Covid Funds Covid (ESSER funds) are gone. They expired September 2024 We estimate ESSER Funds boosted Stride EBITDA by >25% of EBITDA. Formers estimated ESSER funds flowed to Stride’s bottom line at a 50-75% rate Covid Funds massively reduced school operating losses that Stride is contractually obligated to reimburse — Loss reimbursement went from –$555 per student to –$87 per student Enabled Stride to claw back the past operating losses paid to schools. Increased high margin fees earned by Stride ESSER Funds came with “no strings attached” – Stride took advantage and “supplanted” (paid for) existing expenses with the new Covid funds. Executives told us it was “a little bit of a shell game.” “Ghost Students” = Stride collects millions for fake “ghost students” it is not educating. Invisible Ghosts – est 5-10% of total enrollment Described as “fake students” Truant Ghosts – est 20-30% of total enrollment Stride focuses on getting these students to “show up” on the days where states count initial attendance then disappear. Stride cut the staff who tracked attendance and kept kids in class. Seven Undisclosed Schools Left Stride Since 2021 Another large school is leaving in FY26; competitors est Stride will lose 1-2 schools a year Management talks about opportunity to add schools in 19 states – but Stride already has been kicked out of 9 of those states Allegations of Overbilling & Fraudulent Reimbursement Claims. “It’s outright fraud…[Stride] created a shell company, and they put all these kids under the shell company as interns.” ~Former Teacher Qui-tam lawsuit accused Stride of using a fake program to get 300% higher reimbursement. Stride schools enroll students even when it’s impossible to earn academic credits. Ridiculous mark-ups on supplies sold to schools: Charged $400 for $300 chromebooks; $27 if students change classes (aka click a different class link) Risk of Ghost students going away is mispriced – Kamala Harris Cracked Down on Ghost StudentsOnce Before As California’s attorney general in 2016, Harris investigated the ghost students and forced Stride into a $168 million settlement – an amount equal to ~20% of Stride’s revenue that year. Could she do it again as president? Stride Schools Rate Terribly & Educators See Dropping Demand Stride schools are rated “3/10” on Greatschools.org – That’s terrible! Educators say demand for online school is “much lower;” kids say they prefer real school CEO James Rhyu’s Colorful Leadership Style – The Phrase “A**hole” came up frequently Disdain for students – “He says they’re students, they’re dumb” We heard appalling stories – Rhyu’s inappropriate stories about “when he used to travel in Asia and the hookers” And telling female executives to “smile more and be less ambitious” Formers told us about: “Rageholic episodes” with “Yelling” and “throwing tantrums” We are short Stride Inc (LRN). We think Stride is the last Covid over-earner to fall off the free government money cliff, and management has been hiding this from investors. Now that the ESSER Covid funds are finally ending, investors are set to find out the truth. Fuzzy Panda Research is Short Stride Inc. (LRN)” https://fuzzypandaresearch.com/stride-k12-esser-james-rhyu/
Let’s go $TSLA Van - how much longer for S&P? Is 6,660 doable by Election week? or we do 180 with next few weeks
Well, you might miss a big upside move, but I think it might be prudent to sit on your hands for awhile. The markets aren't going away. Stairsteps up, window jump down. But you go Camel. Queued just for you.
GM everyone. Well I yearn for the days when I did " TA All-Day " which was one stk per week. In the last two nights I have completed 27 TA reviews and helped 27 children. For free. Some interesting news stories today... AirBNB attempting to buy EXPD at one point? I don't know how // Apple working with Boyd China at one point on a car. We have added another$22,000 to the Renno Fund!!!! Absolutely killer Nuclear gains... but there is one stk languishing isn't there... I had said I was completely out of nuclear and happy for it but it seems there may be one play left... More on that later.
Did you hear about the Trump down hall with Latino undecided voters. It was the first time we saw Trump not in front of the paid folk.. that Fire fighter group of ladies all proven fake.. and the fake Black voters.. but a real group of people who asked real questions. Well the man with the makeup fell apart. On immigration and who would pick the fruit no answer. He babbled. On taking part in insurrection no answer. On Global warming he ridiculed the water rising and said the only global warming that mattered was.. nuclear.? Boy to a state ravaged like Florida and N Carolina by global warming conditions- to be told how stupid you are to believe in global warming when a storm goes from 1 to 5 in an hour due to warm oceans... to tell these ruined folk how stupid they are... very bad move.
It's pretty amazing I needed $50,000 to add to a 3 way House fund we are setting up and I earned every cent of it here in these pages over the last month. Nothing will come out of my bank account. I have always been able to churn dollars and bleed markets when I have to and in this case I even squeezed in a painting at auction. The market is like a citrus tree. When ripe.. pick. Illumina price target raised by $40 at Leerink, » 07:29 ILMN
Churchill Downs price target raised by $7 at Wells Fargo, here's why » 07:12 CHDN Turtle Beach revenue growing strongly, says Roth MKM » 07:45 HEAR Dynatrace assumed at Outperform from Neutral at Wedbush » 07:28 DT I think today we enter DT./ The question is.... HF level or E trade level?