FOLLOW THE MONEY….Here’s the deal: Edison Schools, the brainchild of Chris Whittle, is in the business of taking over public schools and running them with the efficiency and accountability that are the hallmarks of the free market. Unfortunately, it turns out they have been running schools with, ahem, the efficiency and accountability that are the hallmarks of the free market.
Basically, Whittle is a slick talker who’s run every company he’s ever managed into the ground (see amusing takedown here). Edison followed his usual pattern: it never made money, was able to do the usual bubble-era IPO anyway, and then saw its stock tank two years later when a rash of bad publicity and a setback in Philadelphia caused several analysts to take off their blinders, realize that the company was going nowhere, and downgrade its stock. Edison currently trades under $2, has a ton of debt, and has reportedly been losing contracts.
Sounds like a company to stay away from, doesn’t it? So why would Liberty Partners, an investment fund, provide funding to allow Whittle to take the company private, in the process giving himself a salary boost to over $600,000 per year? Why do they have such confidence in Edison’s rather bleak future?
For the answer, check out Josh Marshall today and find out whose money Liberty is actually investing. But don’t do it unless you have a strong stomach.