Shares of Higher One, the higher education payments and financial services company, closed down two cents to $8.36 Friday, a 5% drop on the week and capping off a more than 20% drop from its year-to-date high of around $11.50.
The company went public in June 2010 at an initial price of $12 and closed its first trading session at $14.27. This week, however, the stock at one point fell to an all-time low of $8.33.
Higher One has long faced criticism from consumer advocates and some Democratic lawmakers for its marketing tactics and fees. But it is also facing investor pressure to grow its revenues following a revision of its fee schedule that led to a paltry $1.1 million gain in the last year.
The mainstay of Higher One’s revenues — fees from checking accounts that students use to access their financial aid from colleges affiliated with the company — accounted for as much as 77% of its revenue last year. But that figure has fallen to 65%, according to the company’s second quarter earnings, leading investors to respond over the past two weeks by selling the stock. Higher One shares traded at around $10.50 before it reported second quarter earnings two weeks ago.
The company is also in an uncertain regulatory environment. The Department of Education might soon start a rulemaking process over financial aid disbursement that could result in new rules for Higher One and the Consumer Financial Protection Bureau, which can regulate debit cards, opened a wide-ranging inquiry into on-campus financial products earlier this year.
Although no new rules have been announced, the company has been in the crosshairs of consumer protection activists for years and has tangled with regulators in the past, including agreeing to an $11 million settlement with the FDIC last year over some of its fees.
More regulatory action is certain to increase downward pressure on Higher One’s stock price.