Debunking Citron's Hit Job on World Acceptance Corp.

Last week, Citron Research issued a report on World Acceptance Corporation (WRLD) that demonstrated a staggering degree of either ignorance or malfeasance. Their tabloid-style reporting seems designed to maximize fear in stockholders. One could reasonably assume it is because Citron is short the stock. They claim there is a disconnect between reality and what World presents to investors. The truth is there is a huge disconnect between reality and what Citron presents to readers.

Setting aside the outrageous accusations of World Acceptance being a "borderline-legal Ponzi scheme", Citron either doesn't understand installment loans, or is manipulating the truth to their own ends. Installment lenders exist because the old finance companies like Beneficial are gone. They serve the market of folks who need to borrow about a thousand bucks, and want to be able to repay it over a long period of time. With installment loans, customers can borrow more than with a payday loan, and take much longer to repay it. It hardly "takes advantage of society's most vulnerable". If anything, it give these folks access to credit they cannot get anywhere else. Since the loans are unsecured, they naturally carry higher rates and fees.