Curtains For Corinthian? Stock Down 60% On 'Going Concern' Worries
Corinthian Colleges (NASDAQ: COCO) has taken a nosedive after it warned investors it may not continue as a 'going concern' if it is unable to bridge a shortfall in cash flow stemming from a federal investigation.
Corinthian said its lenders have refused to provide new financing, the need for which was imposed June 12 by the Federal Education Department.
Regulators told the company they will delay payment of student aid to Corinthian by 21 days because of foot-dragging by the company in an investigation launched in January.
Previously, the payments were made within 72 hours of each request and were a key to the company's business.
As of last month, short interest in Corinthian included 27 million of its 87.6 million shares outstanding.
The federal investigation concerns allegedly false job-placement rates and is in addition to at least a dozen other state and federal investigations into the company's business practices.
Corinthian Colleges traded recently at $0.32 per share, down 61.7 percent.
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