As the market cap drops, you begin to wonder what this company is really worth. Why isnt anyone interested in it for $40M?
Well lets see....
You have an agreement with Wal-Mart (which expires next year) which gives you the right to place Kiosks in thousands of locations. The only thing here is who wants to do their tax return in a Wal-Mart? The timeframe is about 8 weeks. The kiosk has to be staffed for long hours. It is geared around RALs and the ability to cash a RAL check right at a Wal-Mart for $3. More about RALS later. Id put a value of $2 Million on this agreement.
Now you have the RAL agreement with Republic which covers about 50% of the stores. Well wait a minute...the IRS and the Feds don't want Republic to charge such high rates and fees to these customers. These types of loans are being frowned on. You also have an agreement with a small midwest bank to provide Holiday loans. These loans are for a few hundred dollars and really raise no revenue for JTX. So I would put the value of the Banking Agreements at $4 Million if Republic can play ball and $1 Million if its only Metabank.
What about that new online website and software. What about Profiler which is JTX's awesome software. Well the TRUTH is they bought a canned online software package which is not integrated with the instore software. Profiler needs to be redesigned for the internet age. Cost of redesigning the software would about $20 Million to start. So Techonlogy would be ( Minus $20 Million)
Then you have the people. The franchise owners, the office managers, the filers, the corporate offices. Well what are people worth that used to work for Circuit City or Blockbuster. I am sure if you are good that Liberty or H&R Block will hire you. (Value $0)
AAAAH the data for all of these customers. Yes that has to be worth something. Well JTX customer retention and loyalty is about 60% at best. Its a tax return. You do it once a year. More and more people are doing it by themselves online. But some are creatures of habit and will keep using the same people for years. ($10 Million)
So if you add all these numbers up it becomes clear that the company is not worth buying. Did I mention the $350 Million in debt? OOOPS.. Well that is why we are here today. This company would have easily survived the move from brick and mortar to online and a world without RALS had they not gone into such deep debt. Like any corporation their is greed at the top. Many past sins have hurt this company. I don't think the present bunch is concerned for the future either. They are just cashing in what they can get.
In the end JTX is nothing more than a company that aids people in filing their tax returns. Nothing more and nothing less.
You are an idiot. If you think BK is good,just to save the name, go buy some AIG.
If they file BK let them end up like Circuit City dead in their tracks..
None of this K-Mart type crap..
"In the end JTX is nothing more than a company that aids people in filing their tax returns. Nothing more and nothing less."
Thats all you can come up with? Last I heard the prodile says nothing different...
And WalMart is nothing but a store who sells lots of items. and Yahoo is a wjat????
as the market cap drops......... With the market cap of any company (INLUDING high priced GOOG)you can't buy a newspaper..
Do you really understand value. What was Enrons market cap???
In terms of the stock market, Value would include the potential for new markets and ideas which JTX has none.
JTX has built out its footprint in the USA (no international markets), they have very little presence on the internet, they made their money on RAL and predatory lending and now they have no where to go but out.
Wal-Mart continues to grow. Yahoo has penetrated new markets. Both are constantly rebranding themselves. McDonalds just sells food....but the company re-imaged itself and the stock went from $15 to $60. They still sell a lot of junk but they were the first to offer a $1 value menu which has taken off.
Why does JTX continue to use old software?
Why did JTX miss the internet revolution?
Why does JTX do little advertising during tax season?
Why doesn't JTX get into financial planning for people so they have a year round revenue stream?
Why does JTX charge so much for simple returns? $100 for a simple 1040? $300 for an EIC filing? Perhaps you follow McDonalds strategy and you get more volume with lower profit margins. Its a great way to grow.
How and the hell does JTX have $350M in debt on the books?