BMO Capital downgraded K12, Inc.’s stock (NYSE: LRN) yesterday, on account of slowing enrollments. Shares of the stock tumbled on the news, down 25 percent at the start of trading this morning and down 35 percent as this story was posted 40 minutes after the market opened.
K12, Inc.  is a Virginia-based for-profit company that runs online schools in 32 states and attributes nearly 85 percent of its income to public dollars.
K12 has run into numerous problems recently, with school districts dropping their partnerships with the company , news of teachers lacking certification, and instances of very low graduation rates. 
Just last week, news surfaced  of a K12 school outsourcing the grading of student essays to workers in Bangalore, India.
In a press release, K12 explained the slowed enrollment growth:
We believe the increase in Managed Public School enrollments fell short of internal expectations due to several factors, which include, among others:
–The Companys inability to convert the increased volume of student applications into enrollments at a level achieved during previous years due to performance in its enrollment centers and, to a lesser extent;
–The delayed start of the open enrollment period for certain schools.
Managed Public School first quarter enrollments were 5.7 percent over enrollment numbers this time last year, short of expectations.
Revenue is projected to come in between $905 million and $925 million, below the anticipated target of $988.5 million.