TAKING A DIP? What a roller coaster of a day for two grand dames of print! After issuing its second profit warning in three months, Pearson is axing 4,000 jobs—representing roughly 10 percent of its global workforce--by mid year. The company urges shareholders to look in the long run and promises sunnier days ahead, saying these will save £350 million by the end of 2017. The stock market responded favorably: Pearson shares on the New York exchange is hovered near the $11 mark on Jan. 21, after closing at $9.40 the previous day.
The market hasn’t been as kind to another publisher: Scholastic shares dropped 14 percent to below $34 (at time of writing) after the company cancelled plans to buy up to $200 million of its own common stock. According to The Wall Street Journal, Scholastic’s plan included a stipulation that the buyback could be cancelled if major US stock indexes dropped more than 10 percent. The new year has not been kind to the public markets; analysts blame dropping oil prices and China’s economic slowdown.
Scholastic isn’t the only company that’s not so happy about the new year. Instructure’s shares have been dipping from over $22 to around $17 in recent weeks. 2U’s shares has also slid from $28 at the turn of the year to $20.