2U Signs 50 New Online Degrees

As someone who works in finance, I figure the lender did a comprehensive and detailed financial spread of 2U and their beneficial owners (at least they should have), before deciding to lend the company money. Looking cash flow, ratios, trends, etc. would be essential in determining the 2U could handle the debt service.

Now, I have not researched 2U enough to know their financial health, but I did see @SteveFoerster mentioned they had no way to get out of the hole they are in…which would suck for them, shareholders, universities, etc.

 

As someone who worked in credit for thirty years, I figure they didn't go nearly deep enough. For example, the "fast track" bookkeeping - taking large cancellation charges immediately into revenue, the day the policy was agreed to, in the opening contract. Hopefully, in most cases these charges won't have to be paid. Ever. If they do come due -- and they're paid, take them into revenue then. Isn't that normal?

How'd that get past the lenders' bean counters? And I don't doubt there's a lot more odd stuff in that murky pile.

 

That's why we're seeing the disastrous result now. They no can pay. Going by the numbers, a potential default of this magnitude should have been obvious - like the proverbial sore thumb. 2U had first dropped the ball a while back - the lenders should have known better than to simply pick it up and put it back into play.

If the lenders "did their job" then they did it WRONG. Disastrously wrong. Now they pay. A billion dollars -- poof!

"Up in smoke." - Tommy Chong and Cheech Marin

 

Thanks Dustin. I should also clarify that I am not sure of what happened at the MS/MBA level, only within my experience with their USC Rossier doctoral program. I will also say that I suspect the relationship was already on the way out when I was in the program so I am not sure how it was when it began regarding the design or coursework.

 

That's a trick that Enron used: booking future revenue on the books today. Kevin O'Leary made his money with a similar gambit, he owned a toy company that he sold to Mattel but in the quarter before the sale he juiced the financials by sending out an impossibly large amount of product to distributors to sell, since he could book the anticipated revenue on the financials that quarter (to improve his own payout from the sale), even though most of the product would be returned and recorded as a loss in the next quarter (which was.) It led to a lot of legal wrangling but he emerged mostly unscathed.

 

His 2019 bid to become Canadian Conservative leader initially led polls, then fell and he withdrew before voting. Scrutiny of his business record likely contributed to the fall, so there's that.

 

Also I seem to remember him skipping the French debate which did not go down well in Quebec, at a time when the Conservatives were hoping to rebuild there.

 

@Dustin @SteveFoerster @Jonathan Whatley
I tend to like people who don't like Kevin O'Leary. It's been a pleasant morning, to read these posts. Thanks! You guys are great!
And Merry Christmas to you, Kevin O'Leary. Блять!

 

2017, rather. Easy to lose track of how frequently the Conservatives replaced leaders around that time.