Wednesday, February 27, 2008
JRJC - Time sensitive update
Good Wednesday morning to all our Psychology of the Call readers.
We believe our conference call analysis of JRJC will make you very happy come Friday morning. JRJC will be reporting their earnings after the market tomorrow, Thursday.
Do not buy or hold any shares of JRJC. Short the stock anywhere in the $16.00-$18.50 price range. We see shares of JRJC slumping to the $12.00 range come Friday.
JRJC is currently trading at $18.08, it is actually up $1.10, absurd! JRJC's management stumbled through their last conference call. We were able to catch some tells from the call. Management's conviction in their business model is suspect at best; in their own words: "We have very aggressive growth goals". That kind of empty rhetoric is a recipe for disaster, and we urge you to take advantage of this opportunity. The tone of the questioning from analysts to management was horrible at best, contributing to JRJC's 46% percentage rating and letter grade of F. One analyst in particular quizzed JRJC on what many consider a "dinosaur" subscription business model, and management offered no convincing come backs.
JRJC recently released some news we feel is more of a desperation tactic than reason for joy. JRJC will try to excuse their current March ending quarter in terms of the Chinese New Year, when the market was closed for a full week! JRJC relies on the market to be open and rising; neither worked in their favor for the March ending quarter. They must address this issue in their forward guidance, which will be great for shorts. We feel their guidance will raise more questions on the viability of their subscription business model going forward.
We advise our readers to short JRJC into what we predict to be a train wreck conference call and guidance. The tone of the conference call will only get worse with every quarter here.
Happy trading, and tell your friends, the Psychology of the Call matters.
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