Whitney Tilson is out with another (see first one here) strong response to a ‘supporter’ of K12, Inc. (NYSE:LRN) (a stock which Tilson is short), who attacked Tilson in a recent article. As Tilson noted earlier ‘Criticism Isn’t Stopping me’, below is the latest. See more from Tilson on the company here and here.

Whitney Tilson fires back via his education reform blog

Jeanne Allen released a letter this morning in response to mine, to which I just responded (see both below).

Whitney Tilson
Courtesy of Kase Capital

I want to be clear that I think Jeanne and the Center for Education Reform do important and valuable work. As best I can tell, we’re allies on everything except online charters – which is why I’ve supported CER in the past! In fact, Jeanne reminded me that I haven’t donated in a couple of years, so I just donated $1,000 on CER’s web site. I wish I could make the gala next week – I’m sure it’ll be a lot of fun and many of my friends will be there.

My quarrel with Jeanne, beyond online charters, is the mocking and obnoxious tone of her articles and, most importantly, how she questioned my integrity. My reputation is my most valuable asset and when it’s wrongly questioned, I will forcefully correct the misinformation.


Dear Jeanne,

I’m so disappointed in you. I’ve been an avid reader of yours for many years and know you’re better than this. Your entire letter yesterday was a series of snarky and obnoxious personal attacks on me and my sources, without a single fact or piece of data to rebut over 100 pages of interviews, investigative journalism reports, research studies, state data, etc. that I compiled.

But you promised to “explore further” the meat of these issues “in [your] next edition,” so I was looking forward to hearing a thoughtful critique of my arguments. Instead you just sent out this??? (see below)

First, you misrepresent what I said about the generous funding your organization receives from K12 and many of its peers creating significant conflicts of interest for you. In my email yesterday I wrote:

“To be clear, I am not criticizing you for accepting their support. But it is highly ironic to raise “ethical questions” about my conflict of interest without disclosing your own.”

The issue here is not, as you are trying to make it, about who supports CER. Heck, I’ve been a CER supporter! Rather, it’s simply one of disclosure. I have a financial interest at stake here, which presents an obvious conflict of interest, so I disclosed it up front. You have at least as great of a financial interest at stake here, which presents at least as much of an obvious conflict of interest, but you didn’t disclose it in your article yesterday – and then had the chutzpah to raise “ethical questions” about me?! Big mistake.

I repeat my main question from yesterday:

Specifically, how much money has the Center for Education Reform taken from K12, Connections Education (the second-largest online charter company), and other online charter organizations over, say, the last five or ten years?

Secondly, you say that you have an “interest in talking about real issues” but in your two articles you have yet to present a single fact, piece of data, or cogent argument about a real issue – K12’s dismal academic results, sky-high student churn, possible bilking of states via lax enrollment policies, possible illegal siphoning of profits from nonprofit entities, etc. If you had nothing of substance to say, then why did you say anything at all?

Lastly, you write that you are shutting down the discussion:

It is neither my job nor my interest to work on rebutting your claims. It’s not my mission nor is it a fruitful use of my time. Why do you have so much of it, I wonder?

This really takes the cake. Your article yesterday was little more than a drive-by shooting – and now that I’ve called you on it, you run for cover, refusing to engage me in a thoughtful discussion about the many “real issues” at stake here. Again, I repeat what I wrote yesterday:

You would be doing me a great favor if you would, in your promised subsequent article(s), move beyond attacking me and my numerous sources, and present actual data and evidence that rebuts my arguments. Please show me – I really want to know – any evidence that the students at even one of K12’s 54 schools are doing well.

Sincerely yours,


PS—The reason I have so much time to research K12 and engage in discussions of the company and the industry is that it’s my job! As a concentrated, long-term, value-oriented investor, I try to become an expert on every company in which I invest. As part of this ongoing process, I have conversations with as many people as possible who I think might have relevant information or opinions. In particular, I try to seek out those who can provide well-articulated contrary points of view – which is what I was hoping to get from you.


From: Jeanne Allen [mailto:[email protected]]
Sent: Tuesday, October 01, 2013 10:25 AM
To: Whitney Tilson
Subject: Dear Whitney – Are we having fun yet?

From the Desk Of

Jeanne Allen

Dear Whitney:

It’s late. I’m home bound on a train from Philly from an extraordinary set of discussions about saving Catholic schools as one of the important options that should remain available to our kids, the least advantaged among them, especially. But I just had to write you.

Before reading your second tirade on online learning, I read the following Facebook post from my oldest son, a TFA educator in Boston. He wrote:

“I was told by one of my students today that she couldn’t do her homework over the weekend because she was kicked out of her house. She then asked me where I lived and if I would be willing to take custody of her because of how rough things are at home. So much going on at home with all these kids I’m glad I can be there in the classroom to help them work toward college and beyond.”

That’s what it’s about, isn’t it? Who has time for these tirades against a method of learning for one group??!

I think you probably need to read my piece again, Whitney. You seem to confuse my words and interest in talking about real issues with waging a discussion about one company.

It is neither my job nor my interest to work on rebutting your claims. It’s not my mission nor is it a fruitful use of my time. Why do you have so much of it, I wonder?

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