Although late to arrive, it seems to me that by sometime next week, we will see an announcement that the company has secured funding for their RAL program. It is a good, low-risk product for many lending institutions that are flush with cash and no good place to loan it to. The real issue for the lender is the speed in which they now need to set up the administration of such a product.
But remember this--RALs will diminish in scope this year and into the future as the IRS steps up the IRS Direct program whereby a refund is wire transferred to a taxpayer in approx. 8 days. Many former RAL customers will hold out to receive the refund directly.
The shorts have taken over this stock and will soon be caught in a short squeeze that will return JTX to normal trading levels. Look at the # of shares short and tell me how they will find enough stock to buy back when it begins to rise.
Yes, Tax return speed usually is the utmost want for these people. However a few returning RAL customers (who aren't entirely desperate for money)could be talked into ARs if they have had a some relationship with a particular preparer, can save some money, get their return filed in timely matter (probably long waits at Liberty and HR), limited funding for RAls this season, ect.
If they do find funding, and that is a big if, by the time everything is set up and the check stock, paperwork, tax prep software, the majority of RAL weason will be over. So, if they are looking for outside sourcing, they are way way too late.
It would be a perfect scenario for traders. Price would spike, probably to point where it could be shorted again, and then spiral downward because any funding that isn't in place to be used in the next 9 days isn't going to be used much.
I'll have to agree, not because JTX is all peaches and cream, but because they are practically priced for bankruptcy. If you look at page 29 of their 2009 annual report it shows an income of 59.9 million in "financial product fees" A 50% reduction there would result in a profit of 30 million for "financial product fees". Nobody has mentioned the fact that they have cut costs by over 3 million per quarter, so that's 12 million in gains from cost savings.