Market Overview

Prescience Point Unleashes Tweetstorm On Credit Acceptance

Share:
Prescience Point Unleashes Tweetstorm On Credit Acceptance

Credit Acceptance Corp. (NASDAQ: CACC) got caught in a tweetstorm by Prescience Point LLC, which credits itself for its short recommendations and proficiency in unraveling shady plots of muddled companies.

Through a series of tweets, Prescience suggested that the squeeze in Credit Acceptance is the best opportunity to sell a red flag-ridden stock. The short seller said it is short on the company, with a price target of $90, way below the currently traded price of $206.50.

Prescience said it estimates a $1 billion gap between dealer holdback paid and what the company should have paid. Accordingly, it believes the crux revolves around portfolio program.

https://twitter.com/PresciencePointhttps://twitter.com/PresciencePoint

https://twitter.com/PresciencePointhttps://twitter.com/PresciencePoint

SEC, Firm Responses

Based on a response letter from the SEC, the firm said the company may not be accounting for purchased loans in compliance with the GAAP. The firm also highlighted the fact that sell side analysts have also begun to question the company's accounting practices, going by the queries raised by Credit Suisse in the company's most recent conference call.

None too pleased with the transition from higher yielding portfolio program to traditional lower yielding purchase program, the firm said the company's business model is deteriorating.

Additionally, Prescience referred to the insider selling in the counter, as about $104 million worth of shares were sold by insiders in 2016.

At time of writing, Credit Acceptance was slipping 1.72 percent to $205.54.

 

Related Articles (CACC)

View Comments and Join the Discussion!

Posted-In: Prescience PointAnalyst Color News Short Sellers Short Ideas Movers Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
BIIBRBC CapitalMaintains277.0
RLICompass PointInitiates Coverage On90.0
CSCOWolfe ResearchDowngrades42.0
NKEBarclaysMaintains132.0
GILDRBC CapitalMaintains86.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com