Shares of Vocation Ltd (ASX: VET) skyrocketed by as much as 44% on Friday, hitting a high of 18 cents, before finishing the day 24% higher at 15.5 cents per unit. That compared to a 0.6% lift for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) for the session.
So What: Education provider Vocation has been the centre of enormous controversy over the last six months following the loss of almost $20 million in key funding from the Victorian Government.
The company had frequently denied the materiality of the impact that a loss of funding would have on the business but has since issued numerous profit warnings. While it gained the media-dubbed title of "Vocation contagion" and lost virtually all traces of investor confidence, its shares plummeted by more than 95% since September.
Although long-term shareholders are still sitting on an enormous loss, there have been some promising signs for the company more recently. First, a strategic review was undertaken which resulted in the sale of a number of 'non-core' businesses and allowed the company to pay down its bank loan facility. It also announced the appointment of Mr Stewart Cummins, who has a strong reputation for leading corporate turnarounds, as its new CEO.
Now What: While there is no way of knowing just how the company will perform in its trimmed-down structure, the stock still presents as a risky investment. However, investors are obviously becoming more confident in its prospects under the guidance of Cummins who may be able to return the company to growth over the coming years.
