1. Why did HRB close down its British operations? I saw a passing reference to this event in the most recent 10Q. 2. Are there plans for HRB to expand in other overseas locales? 3. If HRB's core business is so solid, why has it been so concerned over the past several years about diversifying and cross-selling? Is this a question of seizing additional opportunities or grasping at straws? 4. Have you looked at all the data on Option One's website? http://www.oomc.com/corp/corp_investor_performance.asp Might be worth downloading or printing rather than bookmarking, before it gets taken down. I especially enjoyed reading the Jan 2007 investor presentation, the delinquency reports, and the industry comparisons. 5. Are longs claiming that the securization process has adequately removed risk from HRB? What happens with early defaults? 6. Do longs view the recent balance sheet hits as uneventful? http://finance.yahoo.com/q/bs?s=HRB Does it really not matter that the company is showing negative net tangible assets and significantly declining stockholder equity?
No snide remarks, please, however tempting and easy they might be to make. I don't have an insider's perspective, nor access to big players, so I do what I can to learn from all sides, and then make my own guesses.
Currently, I'm thinking that 2008 will not treat HRB's stock price as kindly as 2007 has so far.
While we're waiting for news, and while it's still posted, take a look at the data on Option One's website, if you're looking to do more due diligence. From 10/30 post:
4. Have you looked at all the data on Option One's website? http://www.oomc.com/corp/corp_investor_p... Might be worth downloading or printing rather than bookmarking, before it gets taken down. I especially enjoyed reading the Jan 2007 investor presentation, the delinquency reports, and the industry comparisons.
HRB will join its three-headed dog pal Cerberus in Hades soon enough. As for now, HRB is still consorting with Cerberus' sibling, Chimera (modern usage: "a fanciful mental illusion or fabrication").
"3. If HRB's core business is so solid, why has it been so concerned over the past several years about diversifying and cross-selling?" ---
Why not? Other divisions would help smooth out revenues, with are largely confined to one quarter for a tax prep only business. Block has a long history of acquiring other companies (usually with little lasting success). Examples include a legal firm, a temp company, and Compuserve. A couple of other possible factors: "Everybody else is doing it." and "What are we going to do with all this cash we are producing each year?" ======
"Is this a question of seizing additional opportunities or grasping at straws?" --
The "grasping at straws" is not even close. Block wanted to diversify to make lots and lots and lots of money. The then (1997 & 1998) upper management looked at Block's possession of tax return data on all those clients. They then thought "boy all that data will give us a tremendous advantage in selling financial products to Block tax clients." Mark Ernst was brought over from AMEX (which had implemented a similar plan) to create the synergy among the various divisions.
Unfortunately, making use of that data is harder than it sounds. (For example, there are major privacy issues.) Also, many Block clients lack resources that they can invest; and those that do generally already have brokers and financial advisors. Finally, execution has been poor. It hasn't been a complete flop, but if you listened to the investor conference calls/webcasts from several years ago, you could hear management almost drooling over the prospect of making use of that data. They expected big things from the new divisions.
They bought a discount brokerage (Olde Discount) in 1999, but (on their website) don�t offer ANY discount brokerage products. And as a (soon to be former) HRBFA brokerage customer, I can say that I was NEVER asked if I was interested in a more robust product than the one I was �grandfathered in� with. In my case, it seems they are trying to be rid of an Olde Discount customer without ever making ANY attempt at growing the relationship. If they had, they could have found out that I was interested in doing business this year with both the Tax and Banking Units and have more resources to invest than my �discount� portfolio might suggest.