A 'Toxic Byproduct of an Imperfect Higher Education System' — Famous Short Seller Known as 'The Assassin' Strikes Her Newest Target

Fahmi Quadir, featured in the Netflix series "Dirty Money" for her success in predicting and betting on the collapse of Valeant Pharmaceuticals International Inc. (now known as Bausch Health Cos. Inc. BHC, is taking on Adtalem Global Education Inc. ATGE in a scathing short report targeting the for-profit education company.

Adtalem, which was previously known by its more well-known name DeVry University, was the first education provider to ever launch an initial public offering (IPO), which occurred in 1991. 

Since then, it has seen its share price soar about 5,000% in the often divisive for-profit education space. 

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If Quadir, whose nickname is The Assassin, is correct, given her successful track record of shorting companies, Adtalem's good fortunes could come crashing down.

On the day of her report's release, Adtalem's shares dropped as much as 23% before paring back some losses. 

According to Quadir, Adtalem "is completely uninvestable." She said everyone "should be angry that our money is being abused in such a careless, careless kind of way," which she supports by citing that 70% of their revenue comes from federal tax dollars.

It's not the first time Adtalem has faced controversy. 

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As recently as February 2022, the Biden administration had $415 million of student debt waived for close to 16,000 student loan borrowers, many of these being DeVry graduates. These borrowers had a unique clause used to justify this decision — their debt forgiveness came from a rule in the law known as borrower defense, which ensures borrowers who were defrauded can get loan relief.

This was the first time the Department of Education granted the borrower defense claim. All the while, Adtalem was allowed to maintain business as usual, while also being permitted to continue accessing federal student loans. 

Adtalem fought back against the short seller's report, moving up its scheduled earnings call by two days to promptly address the allegations to reassure its investors.

Adtalem President and CEO Stephen Beard shot down the report's claims, saying, "Lots of the claims in the report are unsubstantiated" and highlighted the company's "fantastic student outcomes" and a "constructive relationship with our creditors and regulators."

It's worth remembering that activist short sellers stand to benefit from the company's share price falling when they go public with their claims, and it is unknown when Quadir will be willing to cover her short. 

Whether Adalem can put this newest controversy behind it remains to be seen.

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