At yesterday’s Value Investing Congress, hedge funder Whitney Tilson
laid out his pessimism about K12, a for-profit education company for students in kindergarten through 12th grade.
“I know the company and the space well (K12’s primary business is running online charter schools), and it’s a VERY high conviction short due to the fundamentals (a company that’s run amok coming under increasing scrutiny) and the very high valuation (nearly 50x trailing EPS),” Tilson, who runs Kase Capital, wrote in an email.
“K12 reminds me of the subprime mortgage lenders and for-profit colleges when they were flying high — and the ending will be similar I believe,” he said.
Strong stuff. Tilson shared his presentation with Business Insider.