Virtual School Meanderings

May 20, 2021

Pearson to Buy Stride Inc. (K12, Inc.)???

So there was a rumour going around a couple of days ago…

Stride gains on report that Pearson may be preparing takeover bid

May 18, 2021 10:36 AM ET Stride, Inc. (LRN) By: Josh Fineman, SA News Editor
  • Stride Inc. (NYSE:LRN) rose 1.3% after a report that Pearson plc (NYSE:PSO) is said to be preparing a bid for the online education company. Pearson fell 1.5%.
  • Pearson is said to be working with advisors on a potential offer for Stride, which was previously known as K12, according to a StreetInsider report, which cites an unidentified source.
  • Stride was previously reported to be a potential takeover target about a month ago, according a Betaville report.
  • Stride short interest 9.1% of float.
  • Last month, Stride gained after earnings but Morgan Stanley sticks with cautious rating.

In less than four hours, the story was cleared up.

Pearson says it’s not preparing a bid for Stride Inc.

May 18, 2021 2:08 PM ET Pearson plc (PSO) By: Josh Fineman, SA News Editor
  • Pearson (NYSE:PSO) said it’s “not preparing a bid” for Stride Inc. (NYSE:LRN), a Pearson spokesman tells Seeking Alpha.
  • Earlier, Stride Inc. rose after a StreetInsider report that Pearson  is said to be preparing a bid for the online education company.
  • Stride, formerly known as K12, is paring earlier gain, now up 2%.
  • Stride was previously reported to be a potential takeover target about a month ago, according a Betaville report.
  • Stride didn’t immediately return Seeking Alpha request for comment.
  • Stride short interest 9.1% of float.

Two things I find interesting about this story.

  1. On the news that they might be buying Stride Inc/K12, Inc., Pearson stock actually decreased (i.e., the market thought it a bad purchase).
  2. What would the cyber charter school landscape have looked like with both Stride Inc./K12, Inc. and Connections Academy all under the same company?

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