Reply #20: From Soup - regarding the 'business model' [View All]

[salin]

of edison that I described above - re getting a critical mass of schools and then turning a "big profit".

http://pasaorg.tripod.com/edison/pdfs/nodreams.pdf

Sept. 8, 2003
San Francisco
Parents Advocating School Accountability www.pasasf.org

Edison Schools: 'dreams unrealized' Two years ago, Edison Schools was expanding rapidly and proclaiming that its model was revolutionizing education. The controversial, for-profit company predicted that it would soon be running 1,000 schools nationwide.

But as school opens this fall, Edison Schools is reduced to issuing press releases announcing wanly that it has had some contracts renewed. The company has suffered a net loss of about 25 schools since last year. The New York-based company uses fuzzy and inconsistent methods for counting the schools it runs, making it tough to determine how many client schools Edison has lost. By conventional counting methods (one site equaling one school), Edison appears to have lost 29 schools last school year, scattered among 13 severed school-district contracts, from Boston to Dallas. Edison
opened three schools this fall, counted by conventional methods. Edison’s website still states that the company runs 150 schools, the same number it gave last year based on its controversial counting method.

---------------snip

Edison operated for 10 years without making a profit, then announced that it would show its first profit in the quarter ended in June 2003. That quarter’s results, anticipated to be 20 cents per share, will be reported later this month. But analysts in a WSJ.com survey predicted a fall back to unprofitability for the subsequent quarter, ending September 2003, with the loss projected at 37 cents per share.

A July Miami Herald article covering the stock buyback didn’t let Edison off gently. “Edison Schools, the visionary company whose backers believed it would revolutionize public education in America, is hobbling into a buyout by the man who founded it, its dreams unrealized,” reporter Gregg Fields wrote. The New York Post described Whittle as “suffering a $1.9 billion wipeout of his company’s market value.”

Investors, the Miami article reported, were furious at the $1.76 offered buyout price. ''Now you know how the teachers and the kids have been treated all along,” an irate investor posted on the company’s Yahoo bulletin board, as quoted by the Herald.

And in the last week of August, eight messages were posted under the unexpurgated subject line “Shareholders are getting f****d.”

--snip (sounds like a "Sound investment for a pension fund to me) ----

Edison opened new schools this fall in Indianapolis, Ind.; Pittsburgh, Pa.; and St. Louis, Mo. – one in each city. Over the past school year, the company lost contracts in Battle Creek, Mich.; Boston, Mass.; Dallas, Texas; Hamden, Conn.; Macon, Ga.; Minneapolis, Minn.; Mount Clemens, Mich.; Nash/Rocky Mount, N.C.; Pontiac, Mich.; San Antonio/Atascosa, Texas; Trenton, N.J.; Tyler, Texas; and Wichita, Kan. The lost contracts with the 13 districts comprised at least 29 schools.

The controversial method by which the company sometimes tallies its schools counts grade groupings, or parts thereof, as one school – K-5, 6-8 and 9-12. Thus a school comprising grades K-8 would count as two schools; a school comprising grades 5-9 would count as three. The
company has used that counting method interchangeably with a per-site method, without explanation.

----------------------------Much More-----------------------------

Wonder what the Miami herald article said, who wrote it, and what their take on this move by the pension fund is????