Education Alternatives Inc. stock plummeted $5 a share yesterday after news reports hit the stock market that the company lost a contract to manage public schools in Milwaukee and that its bid to manage schools in Washington is on hold.
EAI, which manages 11 Baltimore public schools, lost out in Milwaukee to the Edison Project, a New York-based company founded three years ago by entrepreneur Christopher Whittle and former Yale University President Benno C. Schmidt Jr.
The scope of the contract has not been determined, but Milwaukee was often mentioned as one of EAI's best prospects for new business because the city's school board was in favor of privatization.
In Washington, prospects of landing a contract further dimmed after the Washington Times published a poll yesterday showing that the district's school board members are split on privatization.
The news hit the market yesterday and sent the company's stock into a free-fall.
The stock dropped 23 percent, or $5 a share, to $16.75. The fall wiped out $30 million in market capitalization.