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Investors,

ESI is a house of cards. I worked from them a few quarters as an instructor I was amazed what I saw. I want to make it very clear I am not a disgruntled employee I am just smart enough to see the big picture since I have been investing for a long time. I talked to former and current employees in other campus because I thought it was only in my campus at first. I was completely wrong it's the whole organization.

1. They don’t have guidance counselors they have recruiters the recruiters are rated on how many butts or students they can enroll in ITT Institute. Recruiter become very creative and it’s completely encouraged by the Dean & Director of the campus as they need to make their “quotas”. Being creative means going and finding a homeless person that can fill out a form and ask for government assistance so the campus can get paid. Another example of being creative is and I personally saw this one because he ended up being my student is finding a clinically diagnosed mentally handicapped student and signing him up for all the government assistance so the school could be paid for. One more is putting students that have felonies on their record into a criminal justice program! In most state you can’t do anything criminal justice if you have a felony. Students are given false promise of making $100,000.00 upon graduation etc. An associate’s degree cost around $50,000.00 and whatever the Federal government doesn’t cover the student is forced to take loans at a 22% interest rate. From a stockholder point of you this is actually a good thing but still not ethical.

2. Entrance exam is a very easy exam that anyone can pass. I wish I remembered the name of it. However, in the case the student didn’t pass because he was mentally handicapped or was homeless and could not read. They would take the test for them to get them a just passing grade so they could go ahead and enroll them.

3. Once the student is assigned to the instructors it’s their job to educate them. The educational material that is provided for the students is subpar and most of the material does not work. This made any good instructors in classroom experience miserable. The instructors are given a bonus if they get more then 80% attendance rate in their classroom. The reason for this is because the federal programs have attendance requirements attached to it. The school won’t get paid if student isn’t in class. The funny part here is no one looks over the shoulder or audits the instructors. They have every incentive to cheat on the attendance so they get their bonus and of course ITT-Institute to get paid. Additionally at the end of the quarter an instructors rating is mainly based on attendance of their students. Conflict of interest I think so!!!!!!

4. Final grade time comes and instructors are not allowed to fail students. We were verbally told that ITT-Institute would not ask you to come back if you had any failures in your class. They would never put such a think as a written policy even though it is. Thus, even a mentally handicapped person can have a degree from ITT Institute.

5. Students were given pizza parties, hotdog parties or ice cream parties at least once a week to encourage them to continue to come to class because of the demographic that they target this was somewhat successful.

6. ITT-Institute is independently nationally accredited meaning none of it’s credits are able to transfer to a real school (State schools, Private Regionally accredited schools, etc). The reason I am stating that is because if a student graduates they have two options continue their education which doesn’t happen because they quickly find out their degree is not worth the paper it’s printed on. The second option is to go into the work force and since the industry does not respect a degree from ITT-Institute they are lucky to get an entry level position making $10.00 an hour. It’s really hard to pay back a $50,000.00 degree making $10.00 an hour so students default on students loans.

7. ITT Institute still get to keep the money at this point. However here is the kicker for stock holders. The federal government or GAO office has finally caught on to their scheme and is starting to bring the house of cards down. Senator Tom Harkin has spoken on the house floor about the exceptionally high default rate by for profit school graduate and non-graduates. Compared to the defaults of a traditional non-profit school. The figures are clear. Maybe the level of detail I have just exampled is new to some shareholders but the genie is out of the bag. Just look at the short interest in this stock it’s around 20%. Several big institutions are waiting for this stock to tank and it looks like it will be sooner rather then later. In 2004 10 ITT Institute campuses were raided by the Department of Education it’s not like ITT Institute is new to corruption.

Investors hat:

ITT Institute will get more strict regulation from the federal government which will eat into their profits. Bad thing for the stock & company.

ITT Institute name is not very good and less students are going to attend their campuses as former instructors, deans, directors, students and internet message boards will tell everyone they know not to attend. Bad thing for stock & company.

The economy is improving and the typical trend is their to be less people wanting to go back to school for an education. Bad thing for the stock & company.

ITT Institute technology infrastructure is completely outdated 1990’s technology and is in serious need for a complete upgrade. Increase operating cost going forward. Bad for the stock & company. How an Technical Institute is on outdated technology is just a perfect example of what a house of cards this place is.

I can’t think of a single reason anyone would be buying this stock going forward.

Full Disclosure: I am thinking of shorting the stock but currently don’t have any interest. (Shorting is a little more risk then I am usually willing to take). I am probably going to play it with some options strategy. I don’t like unlimited risk!

On a personal note this whole business is unethical and Kevin M. Modany is the next Jeff Skilling.

Den

Good Links

http://www.youtube.com/watch?v=4XZp-2HDRG0

http://www.youtube.com/watch?v=eXH-uNMwbVE

http://www.youtube.com/watch?v=qK2DUqrNHM0

http://www.youtube.com/watch?v=BQoeRR5Ocy0
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you sound like a disgruntled employee out to get them!
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I just read this post it's been a while since I have been on this forum. It's been a long time since my last post and the situation is just getting worse at ITT. I am not a disgruntled employee. I think the 39% short interests proves that I am not the only one seeing this. This company maybe bankrupt in the next year or two. BUY PUTs you won't regret it! I have made great money on this trade the stock has taken a noise dive!
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I haven't been on this forum in a while and I have to say I have laughed all the way to the bank on this play. The stock was over $70.00 when I made the call now sitting at $13.00. Pull up a chart on this company and you will see the noise dive the stock had taken and look at my post dates! I bought puts and then reinvested them and double down on them several times.

To the poster that said I was just a disguntled employee I have to be the smaller man and say go eat crow or go pound sand (you get the picture)! My analysis was extremely objective and was dead on! In fact now there is a lawsuit against the board and CEO for lying to investors.

http://finance.yahoo.com/news/law-offices-howard-g-smith-221...

This corporation is very unethical and I am glad there are folks taking steps to get rid of corporate cultures like this board and CEO created. The only thing that would make this better is if they go to jail and the company goes bankrupt.
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