Skip to content

Pearson Stock Falls 30 Percent; Worst Day Since 1986

January 18, 2017

Three years ago, in 2014, education and publishing mammoth Pearson expected to make a killing on the Common Core State Standards (CCSS).

I wrote about Pearson’s CCSS profit expectations in this post based upon Pearson’s February 2014 earnings call.

I noted that when one market analyst pressed for an alternative plan of action in case CCSS did not work, Pearson CEO John Fallon had nothing to offer.

Fallon seemed to believe that Pearson’s profits from CCSS were a sure thing.

Cut to the Financial Times on Wednesday, January 18, 2017, which stated that Pearson’s shares dropped “as much as 30 percent” on that day– hitting their lowest since 1986.

The market price per share at the close of 01-18-17 was $7.13.

The next lowest price for Pearson stock was $7.72 per share in February 2003– 14 years ago.

Fallon described the Pearson drop (plunge?) in stock as “deterioration.”

But wait– there’s more:

Fallon apparently told investors that he expected US profits “to fall by a further 6 to 7 percent” in 2017.

There is no mention of CCSS in the January 18, 2017, Financial Times article; instead, the focus is on unexpected drops in student enrollment in college coupled with “a surge in the textbook rental market.” The January 18, 2017, Telegraph notes that Pearson’s unanticipated profit loss to textbook rentals is to textbook rentals to Amazon.

One year ago, in January 2016, Pearson announced it would be cutting 4,000 jobs.

The Financial Times reports that Fallon says that he is not yet ready to resign as Pearson’s CEO. I wonder how long Pearson’s board will allow him to call the shots on his own employment.

Not long, perhaps: According to the January 18, 2017, Telegraph, stockholders are pressuring the board to cut Fallon loose.

Fallon has been CEO since 2014– the same year of the earnings call in which he offered no Plan B for a faltering CCSS.

On December 23, 2013, Pearson stock closed at $22.20 per share.

Under Fallon, Pearson’s stock price has not reached $22.20 per share, though it came close on one day, March 15, 2015, at $22.16 per share. (Click images to enlarge.)

pearson-stock-2

pearson-stock

(To see a graph of Pearson stock prices from 1997 to 2017, click here.)

Beyond March 2015, we see (among other unfulfilled paydays) evidence of the CCSS payoff for Pearson.

Down, down, down.

john fallon 2  John Fallon, Pearson CEO (for now)

___________________________________________________________

Released July 2016– Book Three:

School Choice: The End of Public Education? 

school choice cover  (Click image to enlarge)

Schneider is a southern Louisiana native, career teacher, trained researcher, and author of both A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education and Common Core Dilemma: Who Owns Our Schools?.

both books

Don’t care to buy from Amazon? Purchase my books from Powell’s City of Books instead.

3 Comments
  1. There are a few local legislators who I hope made heavy investments in Pearson.

    • may the vultures who have made big money through manipulating test-score school “reform” go at each other’s throats

  2. Poor Justice Breyer must be losing big on his million in Pearson stock, and his wife, a member of the Pearson owning family, might even have to sell one of the yachts she bought selling bogus tests. Sorry, I’m not feeling very charitable toward millionaires and billionaires this week.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: