Stock Trading Naughtiness With Stride

You may have heard about Senator Markwayne Mullin lately because he's been a big ole MAGA cheerleader for unqualified cabinet nominee Pete Hegseth and indeed the whole misbegotten cabinet. 

But he's also in the news for some stock trading shenanigans, specifically shenanigans involving Strife (formerly K-12) the 800 pound gorilla of cyber-charter schooling. Mullin sits on the Senate Health, Education, Labor and Pensions Committee, so trading involving stock in an education firm smells a little fishy. 

Still, the whole scene is on brand for Stride, which was never so much about education as it is about profiteering. Stride's history isn't nearly as well known as it deserves to be; let me pick some details from my own coverage.

It was founded in 2000 by Ron Packard, former banker and Mckinsey consultant. One of its first big investors was Michal Milken. That investment came a decade after he pled guilty to six felonies in the “biggest fraud case in the securities industry” ending his reign as the “junk bond king.” Milken was sentenced to ten years, served two, and was barred from ever securities investment. In 1996, he had established Knowledge Universe, an organization he created with his brother Lowell and Larry Elison, who both kicked in money for K12.

K12 was frequently in the news for one shady deal after another. Packard was himself sued for misleading investors with overly positive public statements, and then selling 43% of his own K12 stock ahead of a bad news-fueled stock dip. Shortly thereafter, in 2014, he stepped down from leading K12. 

The New York Times had quoted Packard as calling lobbying a “core competency” of the company, and the company has spread plenty of money around doing just that. And despite all its troubles, Stride is still beloved on Wall Street for its ability to make money.

So maybe it's no surprise that a big (quiet) investor in Stride is the investment behemoth Blackrock. BlackRock is the largest money management company in the world, founded and led by Larry Fink. Larry's brother Steve is on the Stride board. Steve was also, starting in 1984, Michael Milken's next door neighbor and "trusted confidant." It was 1988 when Larry Fink started BlackRock under the umbrella of Steve Schwarzman’s Blackstone Group. In 2000, Steve Fink was heading up Nextera, part of Milken’s Knowledge Universe web. Additionally, according to a 2011 Seattle Times article, Milken graduated from the same public high school as Larry Fink.

In short, Stride has always been about getting investors a return for their money, and not so much about providing an actual education to students.

So in that setting, how unexpected can it be that a senator might decide to dip in for a little insider trading. This is all just part and parcel of unleashing market forced in a human service sector. Just another day with the invisible suggesting that folks grease its invisible palm.