Why Navient Stock Dropped 11% on Thursday

Shares of student-loan lender Navient (NASDAQ: NAVI) are down by about 11% as of 11:30 a.m. EDT Thursday after the company announced that it entered a definitive agreement to acquire Earnest, an online direct-to-consumer student-loan refinancing company.

Separately, the state of Pennsylvania filed a lawsuit against Navient and a subsidiary on Thursday, alleging that their "deceptive practices and predatory conduct harmed student borrowers and put their own profits ahead of the interests of millions of families."

Navient agreed to pay $155 million in cash for Earnest, funded by Navient's excess cash on its balance sheet. In a presentation, the company said the transaction would not affect Navient's ability to maintain its annual dividend policy, but that the company will suspend its remaining share-buyback program, which had $160 million of unused capacity as of Sept. 30, 2017.

Source: Fool.com