Hedge Fund Managers See Opportunities in Conn’s Stock Price CrashHedge fund managers such as Christian Leone of Luxor Capital, David Einhorn of Greenlight Capital and Daniel Gold of QVT Financial have seen opportunity in stock price crash in Conn’s Inc.
That opportunity might come in the form of the firm selling itself.
To start the year, Conn’s was trading near $77 per share and then troubles began eating at the retailer, who caters to lower income customers. Defaults began to increase in the credit financing business, which accounts for as much as 77 percent of sales as of the ended in July, according to a Reuters report.
It is the credit financing business that has come under fire. On September 2, Conn’s slashed its profit forecast for its year ending in January due to an increased provision for bad debts related to higher than expected delinquency rates. The stock shed nearly one third of its value that day, dropping from near $44 in price down to $31 and would eventually reach a near term low of $27.37.Source: ValueWalk