This Week in Financial Blunders

Sometimes it’s hard to make a good financial decision. Whether it’s a large decision like “Should we merge our companies?” to a smaller decision like “Should I upgrade to a large drink for only 50 cents more?” it’s sometimes hard to determine the right move. Other times, it’s clear as day, like “Don’t invest in the bitcoin for juggalos.” In either case, this week in financial blunders, we focus on the follies of launching a new service and going to a shady college.

Ready to Stumble

World Wrestling Entertainment just took a low blow where it really hurts: their stock share. Despite a crazy weekend of wrestling in Wrestlemania 30 (Undertaker lost? Come on man!), the WWE saw their shares drop 22% between Monday and Tuesday. This all stems from a new service they’re launching called WWE Network. Similar to Hulu Plus or Netflix, viewers pay $9.99 a month to get exclusive WWE programs including all 12 of their yearly pay-per-view events. Since it launched on February 24, 667,000 people have signed up for the service. This is pretty solid considering their goal of one million subscribers by the end of the year, but many investors are concerned that there hasn’t been a significant amount of fans jumping to the WWE Network. Investors are also concerned with the recent drop in the stock as well; it dropped from $31.98 a share to $21.24 near Thursday’s market close since the WWE Network numbers were announced.

Lower Education

If you watched late-night TV at any point in the last decade, odds are you were motivated/yelled at by this guy to start your career. He was the face of Everest Institute, a (what would later be called) for-profit college owned by the larger Corinthian Colleges Inc. These colleges seemed perfect for people looking for a career without going to a major university; the website for Everest promises “short-term career training,” help looking for jobs after graduation and help searching for financial aid. It turns out to be a false hope, according to an article from Buzzfeed Business. For-profit colleges have been pursued by the Obama administration pretty hard, but Corinthian Colleges Inc. has been investigated by “more than a dozen state attorneys general” and multiple bureaus of the government. What has Corinthian been doing to provoke this? Here’s an overview of what the article claims Corinthian has been doing:

  • Had Everest representatives “who act essentially as salespeople” call people daily, aggressively trying to get them to enroll
  • Recruited students for jobs they couldn’t legally do
  • In one instance, conned a student who couldn’t speak English into signing up for classes
  • Falsified employment rates for graduates
  • Caused many students to go into debt with tuition costs that are expensive compared to other for-profit schools and community college

If that wasn’t enough, the article also claims, “In 2010, 89.8% of Corinthian’s $1.76 billion in revenues came through federal dollars.”

That’s all the financial blunders we have for this week, but if you have another please comment below.

 

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