[Don't worry! We are Nova TOMO!] Nova Corporation, the king of eikaiwa (Search J Goth for Nova), is preparing to release the official annual company results sometime in the next few weeks. While Nova is still saying it will pull a profit this year, the Japan Company Handbook (by Toyo Keizai) has guestimated a possible 50 million yen loss – a far cry from the 3 billion yen shock from last year, but still a loss. Last week the result of the government raids on Nova in relation to violations of the Specific Commercial Transaction Law has come out in an interesting and painful way as well.

The decision :: Thank to Shawn
Essentially, Nova’s policy recalculates the service fees to reduce the amount it refunds if a student cancels. A number of brave (or possibly bored) Students have fought Nova to get full refunds. Even with a loss at the Supreme Court, Nova still maintains the policy.

However, METI has delivered Nova it’s refund policy ass on a platter. The interpretation of the law has been tightened to void even rational recalculation of fees/services when providing a refund. It seems small on the surface, but it is a core component of the business model. Very few students will use their purchased lesson points, and by making it very hard to get full refunds kept the money in the coffers.

Stock Price edging to 100 yen
The stock has been slowly sliding the last 12 months from a 250+yen price in mid-2006 to the low 100s now.

But now the company is scraping the psychological break point of 100 yen. Like a company in the US which goes sub-dollar value, investors eye the 100 yen level with caution. Going sub-100 yen before the release of results could make things very interesting. Upon dropping through 100, the pressure will tend to be downward, but the question will remain, Have they bust the loss cycle or just plain bust?

ECC, Gaba, Geos and others are licking their lips with anticipation, giving sick little hacking giggles like the jackals they are. Has the alpha-jackal bought it, or is there still some life in the monster yet?

This is not investment advice. If you are seeking investment advice here and think you found it, either 1) get off the drugs you are currently on, or 2) consult your doctor to see what drugs are available.

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