3. World of Hurt
We beg of you Dumbest readers, please take pity on the poor workers over at World Acceptance (WRLD - Get Report). While all the other subprime lenders are enjoying their summer vacations, these sad schnooks are stuck in the office finishing up their long overdue homework.
World Acceptance announced after last Wednesday's shortened July 3 session -- right when Wall Streeters were jumping on the next Hamptons Jitney, mind you -- that it was unable to complete its latest annual report for the fiscal year ended March 31. The problem it said was because the company could not get a handle on its allowance for loan losses.
World Acceptance did say that it plans to complete all the necessary filings by the end of July. Nevertheless, that did not stop traders (most likely from the third hole at Shinnecock, Maidstone or Atlantic) from dumping their shares of the company on Friday, sending it down 12%.Or perhaps they were shorting the stock, although with 38% of the float sold short at last check, we would have to think that finding additional shares to sell was probably tougher than getting a reservation at the Palm in East Hampton last Saturday night. And we can only imagine those short-sellers shopping in Sag Harbor were even more sanguine when World admitted in its SEC filing that "it is possible that the Company's amended Form 10-K will report a material weakness in its internal control over financial reporting relating to its process for determining its allowance for loan losses." On Tuesday July 9th, World revealed that it received a notification letter from the Nasdaq that it better get up to date on its filings by September 3 or else face delisting. That said, delisting is a long shot since the exchange can grant the company an extension of up to 180 calendar days from the Form 10-K's due date if it approves its plan to regain compliance. Whether the company's current shareholders will be able to hold out that long is another story.
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