Now this is how a company should respond to negative press. SLM (NYSE:SLM), a student loan lender more commonly known as Sallie Mae, issued a press release responding to a recent CBS (NYSE:CBS) News segment, which alleged that Sallie Mae had provided perks to a University of Texas financial-aid director to gain preferred access to the college's student lending list.
Sallie Mae pointed out that the school has 19 lenders on the list, and that the company only has 6% of the total loan share at the school, lower than its percentage at colleges across Texas. Sallie Mae, Nelnet (NYSE:NNI), CIT (NYSE:CIT) and other lenders are currently under inquiry for paying kickbacks to colleges to steer business their way, a charge they vigorously deny.
But Sallie Mae offered brutal treatment for marginal student-loan lender MyRichUncle (NASDAQ:UNCL), which CBS described in the piece as a victim and an expert in the field, and which in January welcomed the investigation of Sallie Mae. Sallie Mae's response and description of MyRichUncle as a competitor and as a business is absolutely brutal. Miss the link earlier? Here it is again.
When I saw a MyRichUncle presentation this past year at the ThinkEquity conference, the company's management demonstrated its apparent success by displaying a chart of its stock price versus those of Sallie Mae and other vastly larger companies. But executives chose to exclude First Marblehead (NYSE:FMD) from that chart, focusing instead on the share performance of the three "fully integrated student loan companies."
Number of education finance companies eliminated by defining the chart this way? One: First Marblehead. Could Motley Fool Hidden Gems selection First Marblehead have been specifically left out of this slide because its share price had outperformed MyRichUncle's in the defined period?
I think the answer here is "probably."
Bill Mann is the co-advisor for Motley Fool Hidden Gems. He owns none of the companies mentioned in this article. The Fool's disclosure policy holds nothing back.
