Higher One Holdings (NYSE:ONE)

CAPS Rating: 3 out of 5


Player Avatar TSIF (99.96) Submitted: 5/24/2014 10:30:05 AM : Outperform Start Price: $3.77 ONE Score: +10.46

Higher One Holdings, is not performing to it's name....lower lows and potentially much lower depending on how much the government (Fed) fines them for their "practices".

College campus debit card provider Higher One Holdings (ONE)

A heavy fine could put them violating loan covenant agreements with lenders and could drop them much further. I suspect the government may be light, and lenders may be understanding since their last quarter was "stellar"....

A company on the verge of BK might not ride through such an event, but barring serious regulation, Higher One seems to have enough potential for lenders to let them play it through after being down 70% from 52 week highs.

Federal Reserve may not be too kind, however, as Higher One refunded $11M in fees to 60,000 students in 2012.
They claim they have cleaned up their penalty practices, etc.

Risk play....may dive and recover depending on penalties, or may dive and dive...

Facing penalties from the Federal Reserve over asserted violations of the Federal Trade Commission Act relating to marketing and disclosure practices related to the OneAccount option for financial aid refund.

"Although the ultimate amount of restitution or civil money penalties are subject to many uncertainties and therefore are impossible to predict, it is possible the amounts could reach levels that would cause an event of default under our credit facility. While we believe that it is probable that we will have a loss related to this regulatory matter, in view of the inherent difficulty of predicting the outcome of regulatory matters, we cannot predict what the eventual outcome of this pending matter will be, what the timing of the ultimate resolution of this matter will be or the potential range of loss associated with this matter. We are currently unable to estimate a range of loss associated with this matter because it is in an early stage."

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