Pre-holiday rush?

column.jpegIn the rush to file its delayed 10-K, not to mention a 10-Q and an 8-K that released the results of a historical look at the company’s stock options grants (for more on that story see here) before the Thanksgiving dead-zone, it seems that the accountants at Corinthian Colleges (COCO) made a bit of a mistake when it came to what percentage of its revenues were directly tied to federal Stafford loans.

So late yesterday, it filed this amended 10-K that corrected that little piece of information. Turns out that the actual number was 46.6% of revenue, or more than double the 22.1% reported in Wednesday’s filing. The error, the company said, was due to the fact that the original number didn’t include unsubsidized Stafford loans, which are not need-based and where interest accrues even while the student is still in school (see here for a quick explanation of the difference between subsidized and unsubsidized loans).

Granted everyone makes mistakes, including yours truly, but given Corinthian’s track record, it’s hard to cut them some slack. Dumping three significant filings just before a holiday is bad enough. But making a mistake in the rush to dump is problematic for a company that’s been trying to get back on track. I first footnoted the company about a month after I started the blog — back when the stock was trading near $30. Meanwhile, as the Wall Street Journal reported back in July, Corinthian was one of the companies that doled out options to top managers in the wake of the Sept. 11th attacks, creating a hefty windfall. In a story in Friday’s Journal (behind wall), a Corinthian spokesman said "there was no deliberate attempt to take advantage of the Sept. 11 attacks, because the process used to pick the grant dates was the same in all four cases."

While Corinthian managers have done very well, the past few years haven’t been good for Corinthian shareholders. Investors deserve to be treated better than this.