Edison’s improper bookkeeping practices may come back to haunt the company, as was the case with Enron. But there’s more to the Edison story than an accounting scandal. Edison was built on the premise that a private company could run public schools more effectively and efficiently than local government could. Judging from the company’s recent track record, that premise may soon be proven false.
Bruce Fuller, a professor of education and public policy at UC Berkeley who has researched charter schools and is familiar with Edison’s history, says that Edison’s stock performance isn’t unconnected to the company’s classroom record. “I think the softness of the stock price is related to the softness of their test scores and educational results,” he says. “Another way of looking at it is, if they were doing better on the ground and getting more contracts, they wouldn’t have to obfuscate their numbers. Even markets have rules — and [Edison’s] evidence is so mixed that it’s starting to affect their standing with investors.”
…At least ten class action lawsuits have since been filed against the company, one of them by Milberg Weiss, the firm handling a major stockholder suit against Enron. All charge that the company misled investors. Yet amidst this turmoil, the former golden child of for-profit education is planning its biggest project to date: next fall’s takeover of 20 low-performing schools in Philadelphia.