Hedge Funds Lose Big on Career Education $CECO After CEO Resigns

Career Education Corporation (CECO) fell over 40% in early trading Wednesday on news that its CEO Gary McCullough resigned reports MarketWatch. Until a suitable replacement can be found, CECO board chairman Steven Lesnik will serve as CEO. The share price fell from $15.95 at close on Tuesday to $9.56 a share at 10am EST.

According to MarketWatch, “The announcement came as Career Education reported substantially lower quarterly earnings and sales. The company also said that its independent counsel had confirmed allegations that some of the company’s schools had engaged in improper student placement practices.” The New York State Attorney General’s office is currently investigating CECO for possible violations of state consumer protection, securities, and finance laws.

The following hedge funds lost the most:

1. Blum Capital Partners – Richard Blum: Lost $101.9 million

2. Aqr Capital Management – Cliff Asness: Lost $10.2 million

3. Legg Mason Capital Management – Bill Miller: Lost $7.6 million

4. D E Shaw – D. E. Shaw: Lost $4.0 million

5. Millennium Management – Israel Englander: Lost $3.6 million

6. Renaissance Technologies – Jim Simons: Lost $2.9 million

7. Gotham Asset Management – Joel Greenblatt: Lost $2.3 million

8. Highbridge Capital Management – Glenn Russell Dubin: Lost $775,000

9. Ionic Capital Management – Bart Baum: Lost $488,000

10. Sac Capital Advisors – Steven Cohen: Lost $241,000

DISCLAIMER: These calculations assume that these hedge funds did not increase or reduce their stock positions in CECO since the end of June. We did not take into account their option positions.