Grand Canyon Education’s stock price drops after critical report from investment firm – azcentral
The stock price of Phoenix-based Grand Canyon Education has lost more than 10% of its value since an investment firm published a critical report of the company late last month that alleges securities-law fraud.
Grand Canyon Education — one of the more valuable corporations headquartered in Arizona and the former parent of Grand Canyon University — followed with its own rebuttal of several of the criticisms in the report, which it called “inaccurate and misleading.”
The report from Citron Research, whose founder is seeking to profit from weakness in the shares of Grand Canyon Education, cited a U.S. Department of Education ruling in early November as one of a series of “red flags” for the Phoenix company.
Grand Canyon Education sold Grand Canyon University to a nonprofit group in mid-2018 but remains affiliated with it. The department denied a request to convert Grand Canyon University to nonprofit status, concluding that the former parent corporation and its shareholders are still “the primary beneficiaries” of university operations. The department described the university as a “captive client” of the corporation. The decision means the university can’t advertise itself as a nonprofit.