Fahmi Quadir, short seller nicknamed 'The Assassin,' takes aim at for-profit college giant Adtalem

Core Viewpoint - Short seller Fahmi Quadir targets Adtalem Global Education, a $2 billion market cap for-profit education company, claiming it is a "toxic byproduct of an imperfect higher education system" and expressing concerns over its financial viability and ethical practices [1][2]. Company Overview - Adtalem operates institutions such as Walden University, Chamberlain University, and Ross University School of Medicine, with over 70% of its revenue derived from federal student aid [1][2]. - The company has seen its stock price increase over 75% in seven months, rising from just over $33 to more than $60 per share [4]. Financial Concerns - Quadir's report highlights that Adtalem's Walden University has a graduation rate of only 29%, while Chamberlain University has a rate of 40% [3]. - The Department of Education has lowered Adtalem's financial responsibility composite score to 0.2, which may require the company to secure additional letters of credit to continue receiving federal student loan funds [5]. - The Biden Administration is reinstating the "gainful employment rule," which could disqualify many of Adtalem's programs from federal student aid if they fail to meet specific performance metrics [6]. Investigations and Compliance - Walden University is under investigation by the Department of Education regarding its doctoral programs, although Adtalem asserts that there is no accusation of wrongdoing [5][7]. - Adtalem claims it is cooperating fully with the Department's requests for information and expects most of its programs to meet the new gainful employment standards [7]. Accounting Practices - Quadir questions the accounting practices related to Walden University's eligibility for federal student loans, particularly the valuation of its intangible assets, which Adtalem states is worth $496 million as of September 30, 2023 [6].