Q: What is the intrinsic value of Gsy when you consider the recent crises? Based on a conservative estimate considering the write offs etc. what would you estimate the appropriate price of this stock. Assuming lendcare is less than or equal to zero. Thanks.
5i Research Answer:
Please see our update today. In such cases fair value is very difficult to ascertain. More credit losses can quickly erode equity. Covenant breaches can put debt holders in charge, and even with a resolution growth will slow if capital is less accessible. The stock is in freefall and likely institutions will exit (it is now quite small for institutions). In situations like these, there are not a lot of hard assets either to support the stock. It needs a positive catalyst which seems unlikely in the medium term. A floor is just a moving target right now.