GSY shares are down roughly 40% today on the news of an increase in charge offs expected to be $331 mln in the upcoming quarter. Charge offs are expected to be in the mid-teens, then declining in 2027. Most of this appears to be coming from the Lendcare acquisiton in 2021 around auto and powersport loans.
The company is in breach of covenants but notes it has signed agreements to provide relief to these. They have also cancelled the buyback and dividend for the time being. The company has also named a full time CFO.
Not much positive in this release but management looks like they are pulling the band aid off prior to earnings and given the weakness in shares prior the declines seem a bit extreme. Management noted that they don't foresee liquidity issues in meeting their obligations. Given the big one day decline here, we would hold.