For the past couple of years, The Washington Post Co has been trying to hammer home to Wall Street that it’s an education and media company, brushing aside its namesake newspaper or anything related to print. That includes Newsweek, the magazine it owned for almost 50 years. The Washington Post earlier this week offloaded the newsweekly to 91-year-old stereo magnate Sidney Harman founder of Harman International Industries.
The move to rebrand the company is understandable since its Kaplan education unit –known mostly to teens everywhere in need of SAT preparation — pulls in roughly 70 percent of total revenue.
Alas the Washington Post is probably rethinking that spin. In its second quarter results released this morning, the company warned that a proposed rule change from the U.S. Department of Education could have a “material adverse effect” on Kaplan’s operating results. The rule, which is still finding its way through the approval process, would adversely affect the test-prep division’s ability to retain admissions and financial aid advisers among other things, the company said in a statement.
Washington Post shares plunged about 10 percent today making it one of the biggest percentage losers on the New York Stock Exchange. And yet, the Washington Post has some familiar company as Harman International is also one of the biggest losers of day.