Adtalem, a for-profit college giant, is targeted by Fahmi Quadir, also known as 'The Assassin,' in a short selling campaign.

• Fahmi Quadir, a short seller, has identified her new objective: the $2 billion market cap Adtalem Global Education.
• DeVry University, which went public in 1991, was succeeded by Adtalem.
• A new report exclusively obtained by CNBC reveals that Quadir's firm considers Adtalem to be a harmful result of an inadequate higher education system.

Fahmi Quadir, a short seller, has identified her new objective: the $2 billion market capitalization Adtalem Global Education, which operates institutions such as online college Walden University, nursing school Chamberlain University, and Ross University School of Medicine in Barbados.

According to a new report exclusively obtained by CNBC, Safkhet Capital, Quadir's firm, stated that Adtalem is "a harmful result of an inadequate higher education system."

CNBC reported that Quadir has a short position in the stock, indicating she believes the share price will decrease. Her report is due out Tuesday.

In 2018, Quadir, 33, gained fame in the financial industry after appearing in the Netflix documentary "Dirty Money." The third episode of the show featured the fate of pharmaceutical company Valeant, which Quadir accurately predicted. Her reputation for shorting companies has earned her the nickname "The Assassin."

Quadir stated that Adtalem is completely uninvestable due to the numerous existential risks that exist today, which should cause alarm for any investor considering this company.

She stated that the company is wasting federal tax dollars on ineffective programs and predicted significant financial threats. She emphasized that over 70% of Adtalem's revenue comes from federal student aid dollars.

Quadir expressed his anger and felt that everyone should be furious about the careless way our money is being wasted in for-profit universities. He questioned the actions of these executives, who receive high salaries and buy back a significant amount of their stock.

Adtalem's schools are reportedly imposing excessive debt burdens on numerous students, according to her.

These students worked tirelessly to earn their degrees, but despite making consistent payments, they claim they will never be able to fully repay their loans, even if they pay thousands of dollars each month.

DeVry, the for-profit education company with ubiquitous television ads in the 1980s and 90s, went public in 1991 and became the first education provider to hold an initial public offering. Its successor, Adtalem, is not as well-known.

In 2018, Adtalem completed the rebranding of DeVry Education by changing its DV ticker symbol to ATGE. The following year, the company transferred DeVry University to Cogswell Education LLC.

Among Adtalem's properties, Walden University has a graduation rate of 29%, while Chamberlain University has a graduation rate of 40%, according to Quadir's report.

As a leading healthcare educator with over 300,000 alumni, Adtalem offers quality educational programs that prepare students for gainful employment and provide a good return on investment for both students and U.S. taxpayers.

The spokesperson stated that the graduation rates include both full-time and part-time students who are earning their degree while working full time.

The company stated that while some students may require more time to finish their degree than the 8-year cutoff, they are dedicated to ensuring all graduates are workforce-ready.

In seven months, Adtalem's stock price has increased by over 75%, from approximately $33 per share in late June to more than $60 per share at Monday's opening. Institutional investors, including Blackrock and Vanguard, widely hold the company's shares.

Several key areas of the company's financials were the focus of Quadir's criticisms.

The Higher Learning Commission posted a public record in November revealing that Walden University, a unit of Adtalem, is under investigation by the Department of Education regarding its doctoral programs.

The U.S. Department of Education initiated an investigation into Walden University's doctoral programs, and the commission has designated the institution as having a Governmental Investigation.

The federal Department of Education lowered the company's "financial responsibility composite score" to 0.2 in September, which Quadir argued could force the company to seek out additional letters of credit to continue receiving federal student loan funds.

The Department of Education declined to comment on its financial policies when contacted by CNBC.

The "gainful employment rule" is being reinstated by the Biden administration in July, which evaluates student outcomes based on earnings and debt load, as Quadir noted.

According to Safkhet Capital's report, several of the company's programs are likely to fall short of the Department of Education's benchmarks for equipping students with the skills needed to secure well-paying jobs.

Programs that do not meet the standards on the same metric twice in a three-year period will not be eligible for the Department's Federal student aid programs.

According to Quadir, based on the available data, it is estimated that these programs will fail. Unfortunately, there is limited action the company can take to prevent this outcome.

Walden University's eligibility to receive federal student loan dollars is a concern for Quadir, who questioned the company's accounting for its assets. According to Adtalem, Walden's "Title IV eligibility and accreditations" is valued at $496 million as of Sept. 30, 2023.

On Tuesday in Miami at a conference organized by the Managed Funds Association, Quadir will present a speech about her short position.

A spokesperson for Adtalem responded to each of the points raised by Quadir.

Walden University's doctoral programs are not being accused of wrongdoing by the Department of Education, and the company is fully cooperating with the Department's request for information.

Adtalem anticipates that "the majority" of its programs will satisfy the Biden administration's gainful employment rule. If a program fails to meet these standards, Adtalem will have the chance to make changes to maintain Title IV eligibility.

Walden University, being an online educational institution, has few physical locations, resulting in a large portion of its purchase price being attributed to intangible assets. As a publicly traded company, Adtalem is audited by Pricewaterhouse Coopers and is confident in the accuracy of this attribution.