Strayer Education Tanks on Hedge Fund Bet (STRA)

Strayer Education, Inc. STRA is down 9% this afternoon, after hedge fund titan Steven Eisman made his short position very public. The stock is trading lower by $14.39, to $144.64. According to a Bloomberg report, "Eisman, who according to “The Big Short” by Michael Lewis was one of the few investors to profit from the collapse of the U.S. housing market, said he initiated a new short position against Strayer because he agrees with the U.S. Department of Education data that show the loan repayment rate of former Strayer students is 25 percent. The Arlington, Virginia-based company has disputed the data and says its students’ repayment rate is 55.4 percent." "It’s a company that has been very successful in portraying itself as a high-quality company. I believe that’s just a lie," Eisman said in an interview with Bloomberg. "What they said was factually untrue." The Bloomberg notes that "Eisman said in May that the stocks of companies operating for-profit colleges could fall much as 50 percent if the U.S. tightens student-loan rules. Short selling is the sale of stock borrowed from shareholders in the hope of profiting by repurchasing the securities later at a lower price and returning them to the holder." "I’m very confident that Strayer’s loan repayment rate is 25 percent," Eisman said today.