Reuters: Global Markets: Bridgepoint shares continue to slide on accreditation worries

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Bridgepoint shares continue to slide on accreditation worries Jul 10th 2012, 14:57 Tue Jul 10, 2012 10:57am EDT (Reuters) - The heavy sell-off in shares of Bridgepoint Education Inc (BPI.N) continued for a second day after the for-profit education provider's university was denied a crucial accreditation, putting it at risk of losing federal student aid. The stock lost as much as 10 percent of their value on Tuesday morning, adding to a 34 percent plunge on Monday. Brokerages William Blair and Piper Jaffray cut their rating on the company's stock, citing the unexpected denial and lingering uncertainty. Bridgepoint, which wants to switch its accrediting body to the Western Association of Schools and Colleges from the Higher Learning Commission, said on Monday the WASC found Ashford University not complying with its standards. The company also has to prove "substantial presence" in the 19-state north central region by December 1 to retain accreditation by the HLC, heightening the possibility of it losing accreditation status and thus government aid that accounts for majority of its revenue. "We have less visibility into the long-term outcome of whether Bridgepoint will ultimately receive WASC accreditation in 2013 or how the WASC findings may negatively impact HLC's comprehensive review of BPI in 2014-15," analyst Jarrel Price of investment research firm Height Analytics said. Brandon Dobell of William Blair said Bridgepoint lacks positive catalysts. The company faces a period of slow or no growth and decreasing margins while its management determines a new course of action or addresses the WASC decision with more spending, Dobell said. Shares of the company were down 9 percent at $12.99 in morning trading. The stock was one of the top losers on the New York Stock Exchange. (Reporting by Megha Mandavia in Bangalore; Editing by Maju Samuel) Link this Share this Digg this Email Reprints

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