Q: Hi 5I team. Any thought on the 4 something % drop today .Is the business still in operation. Could it go bankrupt? Sitting on a over 70% loss.now .Can you imagine how long for possible recovery? Thanks Larry
5i Research Answer:
We have earnings comments posted; The loss was worse the expected, and the company is too small now for many large investors. If loss rates do not improve, solvency could be an issue down the road at some point. But a takeover is probably more likely. Its locations and brands have value. But there is no guarantee anything will happen, and there is no guarantee that the price would be attractive. We think it could be a 2+ year recovery here.