An Open Letter to the Board and Management of K12

This morning published this article, An Open Letter to the Board and Management of K12:

To the board and management of K12 (LRN):

Since I went public with my presentation and article detailing the many reasons for my short position in K12's stock, I've had the pleasure of both meeting and speaking extensively with CEO Ron Packard and also having a call with Executive Chairman Nate Davis. It's very unusual for senior management of a company to speak with a short seller (full disclosure: I continue to have a short position in the stock, as I discuss in this article), so the fact that they were willing to do so is a credit to K12.

I found Packard and Davis to be refreshingly candid about K12's challenges and what the company is doing to address them, and believe that both of them are genuinely sincere in wanting to do right by the students who enroll at the company's schools. As I discuss below, however, I think their words are inconsistent with many things K12 is doing. In particular, I don't think they fully appreciate the tension and trade-offs between their desire to maximize growth, profitability, and the share price vs. doing their best to ensure that every one of K12's nearly 130,000 students is engaged and learning.