Sallie Mae: All Is Well, Really
Albert Lord, chief executive of student-loan giant Sallie Mae, sent a letter to shareholders today saying his company is being unfairly beaten up by Wall Street.
One year ago, Sallie Mae was trading at $50.09 per share. Today, Reston-based Sallie shares opened at $8.95 per share. The stock lost 32 percent of its value yesterday alone.
The company tried to sell itself last year in a $25 billion deal to private-equity titan J. Christopher Flowers, but the process was derailed by the credit crunch and disputes between the parties. U.S. law changes have also reduced potential returns on Sallie loans.
In his letter today, Lord wrote: "In the case of Sallie Mae, we believe markets are overlooking a number of indisputable facts. The fundamentals of our business are strong."
Lord points out 82 percent of Sallie loans carry a government guarantee, the company has $11 billion in cash and that third-quarter earnings will meet or exceed expectations.
"In summary," Lord writes, "Sallie Mae is a strong, stable and soundly-capitalized company."
-- Frank Ahrens
Please email us to report offensive comments.
Posted by: Anonymous | October 2, 2008 12:53 PM
Posted by: Jeff | October 2, 2008 1:24 PM
Posted by: david,veteran | October 2, 2008 2:26 PM
The comments to this entry are closed.