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Putting Education Reform To The Test

Morgan Stanley Expects K12 To Address Florida Investigation This Week

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Wall Street firm Morgan Stanley is still bullish on K12, Inc.

Financial firm Morgan Stanley says they aren’t all that worried about a StateImpact Florida/Florida Center for Investigative Reporting story that the nation’s largest online educator, K12, is being investigated for using uncertified teachers.

K12 is holding a conference call on Thursday.

“We’d expect the company to address this in more detail during the call,” Morgan Stanley wrote in its comment.

But the firm says there is a long history of bad press surrounding K12 because of the threat of “virtual schools to traditional teachers and powerful teachers unions.

“There’s a risk a few bad actors fell through the cracks,” Morgan Stanley analysts write of K12′s 3,500 teachers who work directly for K12 or at schools they manage.

Morgan Stanley quotes K12 financial filings.

“We generally recruit teachers who, at a minimum, are state certified and meet each state’s requirements for designation as a ‘Highly Qualified Teacher.’”

As the Morgan Stanley comment headline says: “Florida Investigation a Concern, But Seems More of the Same.”

K12, Inc’s stock price was down 13.68 percent Tuesday, as of 3:40 p.m.

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