Corinthian Colleges’ Stock Falls on News of Share Offer

Corinthian Colleges Inc.’s stock tumbled Monday after the rapidly growing Santa Ana company disclosed plans for a secondary stock offering.

The shares slumped nearly 20%, the 19th largest percentage loss Monday in U.S. markets. The stock closed at $42.88, off $10.13 a share, in Nasdaq trading. Despite the pummeling, the shares still are up nearly 80% for the year.

The company, one of the nation’s largest operators of private vocational schools and colleges, said it plans an offering of 3 million shares, with two institutional investors selling about 2.4 million shares and three executives selling 100,000 shares each.

The company will not receive any proceeds from the sale of shares by the stockholders.

Corinthian Colleges itself will sell 200,000 shares, according to a report filed Monday with the Securities and Exchange Commission. No price was set for the offering. The document warned that the stock might fall as a result of the offering, which is expected to increase the number of shares on the market.

Although Corinthian has more than 10.3 million shares outstanding, only about 3 million shares have been available for trading.

The firm has expanded aggressively, buying a number of companies. Last week, Corinthian announced plans to acquire a Los Angeles trade school operator, Educorp Inc., with four campuses.

The purchase of privately held Educorp would give Corinthian 49 campuses in 18 states.

Of the 3-million share offering, Primus Capital Fund plans to sell about 1.6 million shares and BancOne would sell nearly 784,000 shares.

Three executives planning to sell 100,000 shares each are Chief Executive David G. Moore and executive vice presidents Dennis L. Devereux and Paul St. Pierre. Frank J. McCord, who recently retired as an executive vice president and chief financial officer, also would sell 100,000 shares, according to the SEC filing.