Saturday, May 28, 2022

Ambow Education Facing NYSE Delisting in Early August (Dahn Shaulis and Glen McGhee*)

Ambow tauts its place on the New York Stock Exchange (NYSE), but that status may be short-lived. 

Ambow Education Holding (AMBO) is facing financial peril--again.  

The Cayman Islands corporation, with headquarters in Beijing, People's Republic of China, has had financial troubles before. In 2013, the company was liquidated after allegations of financial improprieties. 

Ambow Education was reorganized and quickly found enough capital to branch out, as if nothing had happened in 2013.  The company now offers a variety of services, including several for-profit K-12 schools in China.  Ambow also claims to have patents in a variety of edtech areas, including educational surveillance. *

In 2017 and 2020, Ambow ventured into US for-profit colleges, acquiring Bay State College (BSC) in Boston and NewSchool of Architecture and Design (NSAD) in San Diego.  

According to US Securities and Exchange Commission (SEC) reports, Ambow acknowledges that the People's Republic of China has a powerful influence on the company. How this relates to its US holdings is not apparent--but insiders have questioned the role of Chinese executives and their business practices.  

In January 2020, Bay State College settled with the Massachusetts Attorney General for $1.1 million for misleading students and for violating state statutes on aggressive telemarketing practices and inflating job placement figures. 

And during the Covid pandemic, BSC has worked with Cisco to track students on campus, which may seem intrusive to some Americans. 

"Faculty, staff, and students were each issued a lanyard and a badge holder containing a Bluetooth® Low-Energy (BLE) beacon, which they were required to wear visibly at all times while on campus. Each Meraki AP contains a Bluetooth antenna that listens for intermittent pings emitted by the campus ID badge holders. As people move around campus each day, multiple Meraki APs collect and triangulate the beacon data to track and record their relative location over time. The APs collect and warehouse more than 300,000 data points per day...."

Despite the elimination of its physical library and its receipt of US government bailout funds, Bay State College continues to lose money.   

Faculty and staff have departed as enrollment has dropped below 700 students.  The school is also facing sanctions from its accreditor, the New England Commission of Higher Education (NECHE).

Bay State College enrollment has declined from more than 1700 students in 2012 to less than 700 today. 

NewSchool, has a good record with student outcomes, but has faced issues lately with failure to file reports to the California Bureau for Postsecondary Education (BPPE).  Like Bay State College, NSAD has continued to lose money--as enrollment has dropped below 500 students--making current practices unsustainable. 

Ambow promises to use "shared services" between BSC and NSAD to increase efficiency.  This includes the sharing of key executives. And insiders tell the Higher Education Inquirer they believe this model may be useful if Ambow decides to expand its presence in the US. But sharing key executives between two schools, 3000 miles apart, may be in violation of accrediting policies.  

Meanwhile, AMBO shares have been selling below the $1 a share threshold since December 17, 2021, which means the company could face delisting from the NYSE in early August. 

Ambow (AMBO) shares have been trading below $1 a share since December 17, 2021, down 99.76 percent from its peak. (Source: Seeking Alpha). Click on graph for a clearer image.

With a second strike (a second delisting) in the US, it's hard to imagine more capital available.  But that hasn't stopped the perpetually confident CEO Jin Huang from trying to wrangle another $100 million from unwary investors.  

Both the NYSE and SEC have no comment about this impending meltdown.   

*Thanks to Glen McGhee for his analysis of Ambow patents. 

Related link: College Meltdown 2.2: Who’s Minding the Store? 

Related link: One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

Related link: College Meltdown 2.1 

Related link: The Growth of "RoboColleges" and "Robostudents"

Related link: The Higher Education Assembly Line

8 comments:

  1. I worked for Bay State College for longer than I would like to admit, and none of this is shocking to me.

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  2. Thanks Anonymous. Can you tell me more?

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  3. I worked for NSAD and honestly it was a hot mess. The shared services is junk and doesn't work and I know there are other illegal practices going on.

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  4. Current president of NSAD is based in China and is on the no flight list and has no experience teaching or managing a US based institution.

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  5. Which president GL or TC?

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  6. What illegal practices? Please elaborate. Thanks

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  7. Former Bay State and NSAD employee, Shared services, as well as a stock holder, can confirm place is a mess, get your life jackets kids.

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