Down Goes Apollo

Originally Published In the News March 28, 2008 2.50 PM

Apollo Group is hitting the mat hard today, but the stock is approaching technical levels from November 2006 that, with any luck, should hold.

Still, the stock is likely to be dead money for some time, despite the efforts of former CSFB analyst Greg Cappelli, who left Wall Street to makes an honest living. He is in charge of growing the company’s international growth via a joint venture with the Carlyle Group. How is it coming along?

Amy Ruderman - Oppenheimer & Co.

Can you let us know of the $1 billion that you have proposed for international, how much have you spent so far, what percentage of your current revenue is international, and how fast is that growing and what percentage of the mix would you like that to be in two to three years?

Greg Cappelli

I can’t answer all those questions but I can tell you that the first answer is zero because we haven’t yet closed UNIACC although we do expect that to happen shortly and that’s a $50 million transaction. And then of course there will be some operating expenses out of Global that will be shared 80-20 with our partner [Carlisle] that will start to—once those get big enough to classify as well. And the second part of your question I think was the mix in terms of international students and we haven’t given out the count of University of Phoenix international students at this point but its pretty small as you can imagine in terms of the total of 330 some thousand students.

The stock was perhaps the biggest percentage gainer on the Nasdaq over a ten-year period ending in 2004. The glory days are long behind it, but international opportunities in the industry were compelling enough to attract SAC Capital to buy Laureate Education over a year ago, and if Apollo can execute this stock will eventually get off the mat. No position here, but I will be doing some work on it.

Apollo Group Earnings Call Transcript
Seeking Alpha

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