Education Week: Publicly Traded Ed. Companies Are Rare

K12 Inc., the nation’s largest provider of online precollegiate education, was launched in 2000 and went public seven years later after raising about $140 million in revenue. Like other companies, it moved from being privately held to being publicly traded to raise more money quickly, increase brand awareness, and accelerate business goals.

The company now works with more than 2,000 U.S. school districts and reported $522.4 million in revenue last fiscal year. “No school district could ever invest what we do and get the productivity we get,” said Chief Executive Officer Ronald J. Packard. He said his company invests about $40 million a year in new technology and programs.

But there’s a risk to taking education to Wall Street—one that helps explain why so few publicly traded companies cater to the educational needs of students in elementary, middle, and high school.

K12’s stock prices plummeted after a Dec. 12 article in The New York Times accused the Herndon, Va.-based company of wresting profits from public school dollars by increasing enrollment without concern for student retention, assigning teachers to unmanageably large classes, and lowering standards.

The article also reported that Mr. Packard’s $5 million salary in fiscal 2011 was nearly twice the previous year’s $2.67 million, and that his annual bonus is partially linked to enrollment. Shares fell from $28.79 the day the story ran to $17.25 three weeks later on the New York Stock Exchange.

via Education Week: Publicly Traded Ed. Companies Are Rare.

About Irfan

I am an independent researcher and blogger interested in everything under the sun, but more so in the philosophy and history of education and education reform generally, and specifically in the so-called post colonial contexts

One Response to “Education Week: Publicly Traded Ed. Companies Are Rare”

  1. Education is a mega industry of the 21st century on account of a demand that is continuously renewing for new knowledge and skills. A social good takes on a new role where private money outstrips public allocations or where the latter take on mode of ‘sustainability’ through social enterprise that means ‘profit’ for social regeneration or whatever we may wish to call it. The public sector is also taking the plea with evidence of its problems of low collection of taxes and low performance in governance/management of social good service delivery and hence wants to work with social entrepreneurs. It means that ‘free quality education’ as contained in constitutions and international human rights instruments is severely undermined and needs to be unpacked for the 21st century interpretations… the article is fascinating and we need to figure out this conversation intelligently by unpacking multiple layers and engaging with multiple players in the chain..

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