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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

7/9/12

Bridgepoint Education Inc. (BPI)

Bridgepoint Education is failing its exams today, down 33.67% at $14.26. The for-profit college company that owns Ashford University lost as much as a third of its value after Ashford's accreditation application was denied by a regional accreditor. Ashford didn't comply with multiple aspects of the accreditor's standards in areas related to student retention, maintaining a core of full-time faculty and having an independent governing board. Since Bridgepoint acquired Ashford in 2005, the university has grown 10-fold. This rapid expansion has caused the school to reach a drop-out level near 128,000 students in five years. The Higher Learning Commission said that Ashford has until December 1st to prove it can reach the standards set. It is ironic that an education company cannot pass tests to be able to continue to do business.

Amerigroup Corporation (AGP)

Amerigroup is doing phenomenal today, up 38.02% at $88.80. The Medicaid company saw a pop in shares when news was released that Wellpoint Inc. will acquire Amerigroup for $4.46 billion. WellPoint, the nation's second-largest insurer, said Monday that it will spend $92 per share in cash for Virginia Beach, Va.-based Amerigroup Corp., which runs Medicaid coverage in 13 states, including Texas, Florida, New York and New Jersey. WellPoint says it will pay for the acquisition with available cash, commercial paper and by issuing new debt. The transaction still needs approval from regulators and Amerigroup stockholders, but it is expected to close in 2013's first quarter. Wellpoint state that the acquisition gives them an opportunity for about $16 billion in revenue. It seems Wellpoint was well on point with this acquisition and both companies are benefiting from the deal.
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