Yesterday, Sallie Mae -- known more formally as SLM Corp. (NYSE: SLM) -- lost $2.36 a share, closing at $20.53. The cause of this dramatic loss, over 10% on the day, was the failure of the firm's new CEO, Albert Lord, to reassure analysts that he is in control of Sallie Mae and has a plan for turning things around. In fact, during an analyst conference call on Wednesday, Lord was downright bizarre, refusing to provide any income projections and, worse, making bad jokes and cursing audibly. Yesterday wasn't the first bad day for Sallie Mae, not by a long shot. In the last few weeks, news about Sallie Mae has been universally bad. In October, the private equity firm J. C. Flowers lowered the value of its buyout offer by 20%. The ensuing struggle over the buyout, as well as changes in federal law that may make students loans less profitable, helped send the stock down from the $50 range to the $30s. And it's been all downhill ever since.
In Wednesday's conference call, Lord repeatedly refused to answer analyst questions about 2008, despite the fact that SLM lowered guidance last week. He invited analysts to a meeting in New York next month, saying that they should "get there early because I can assure you, you will be going through a metal detector." Then, to make matters worse, at the end of the call he was heard to say, "There's no questions, let's get the [expletive] out of here."
With leadership like that, it looks like Sallie Mae has a long way to go before investors feel secure enough to jump back in.
Reader Comments (Page 1 of 1)
12-27-2007 @ 7:05PM
Chris said...
It's exciting to see this outfit lose their shirt. They deserve it for making loans which far exceed their actual cash, and being sucker punched for letting GREED get the best of them. In a similar fashion we can make a note that the total actual currency (US) in circulation is somewhere like 3.5 trillion - yet they managed to create over 75 trillion in debt. They are the Federal Reserve, that ILLEGAL entity voted in by Wilson who within a few days of the FED act passing stated he made a serious mistake that our children will regret. How do you spell "national bankruptcy"? The FED did it a few times already, and they will create the next BK... Ron Paul is the only one spreading the message, but Americans and most others in the world are idiots.