Q: Given the decline in GSY today would you be being PRL today? It seems to me as if PRL is declining further due to the GSY news today.
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: Hi, I’m still trying to wrap my head around the big news today from GSY and what may have led to this unfortunate event over the last few years.
How was this ticking bomb hidden in the company and why did analysts and auditors not see this or raise questions further? Or were they ignored? Was management hiding certain facts or was this standard practice and policies of this industry which was allowed? Other than the short seller report late last year, did analysts not dig deep enough into their lending and financials? Who do you think is responsible for this disaster and were known issues building up and just kicked down the road until now? I pulled up the short report and the news from today and asked Gemini to compare the two, here is the summary I got. Thanks for any further comments!
Based on the bombshell news release from today (March 10, 2026), it appears that the short sellers were largely correct in their fundamental assessment of the company’s accounting and credit health.
While goeasy (GSY) spent months "categorically denying" the allegations of a short-seller "attack," today's update reveals that many of the specific "smoking guns" highlighted by Jehoshaphat Research have indeed materialized as significant financial problems.
Here is a breakdown of how the today's news validates the short sellers' original thesis:
1. The "Hidden Losses" are No Longer Hidden
Short Seller Claim: goeasy was masking $300 million in delayed credit losses.
Today's Reality: goeasy announced a massive $178 million "incremental charge-off" for Q4 2025 specifically related to the LendCare business, plus a $55 million write-down of interest and fees. This essentially admits that $233 million in value they were carrying on the books was uncollectible.
2. Validation of the "Accounting Wizardry" Allegation
Short Seller Claim: The company was using "accounting wizardry" and changing definitions to hide delinquencies.
Today's Reality: The company admitted to a "correction of a historical reporting practice" at LendCare. They revealed that customer payments were being recorded as "received" when they were actually still "in the process of being settled" (and some were never collected). This artificially lowered reported delinquency rates in 2024 and 2025—exactly what the short sellers alleged.
3. The Shift in Net Charge-Off (NCO) Rates
Short Seller Claim: Reported NCO rates were artificially low and the "true" rate was closer to 15%.
Today's Reality: goeasy has raised its expected 2025 NCO rate to 12.9% and warned that it will jump to the "mid-teens" in 2026. This is a massive departure from their previous guidance and aligns almost perfectly with the short sellers' projections.
4. Admission of Governance & Risk Failures
Short Seller Claim: The rapid growth in auto/powersports loans was a "time bomb" due to poor risk management.
Today's Reality: The new CFO, Felix Wu, stated that LendCare’s growth required "more robust operational infrastructure" and "enhanced credit risk management." The company is now drastically reducing originations in those categories—a move that effectively acknowledges the short seller's warning that this growth was low-quality and dangerous.
5. Drastic "Emergency" Measures
The severity of the situation is highlighted by the "6-Point Action Plan" goeasy announced today, which reads like a crisis management manual:
Dividend Suspension: Effective immediately, the dividend is cancelled.
Guidance Withdrawal: They have withdrawn all previous three-year financial forecasts.
Covenant Breeches: The company admits it will likely breech financial covenants with its lenders and is currently operating under an "accommodation agreement" (essentially a temporary truce with banks).
Conclusion
While the short sellers may not have been right about every single technicality, their core thesis—that goeasy was overstating its asset quality, understating its losses, and using aggressive accounting to mask a deteriorating subprime portfolio—has been vindicated by today’s news.
For investors, the transition from "Buy" ratings and denials to a total suspension of the dividend and a $233 million write-down marks a total collapse of management's previous narrative.
How was this ticking bomb hidden in the company and why did analysts and auditors not see this or raise questions further? Or were they ignored? Was management hiding certain facts or was this standard practice and policies of this industry which was allowed? Other than the short seller report late last year, did analysts not dig deep enough into their lending and financials? Who do you think is responsible for this disaster and were known issues building up and just kicked down the road until now? I pulled up the short report and the news from today and asked Gemini to compare the two, here is the summary I got. Thanks for any further comments!
Based on the bombshell news release from today (March 10, 2026), it appears that the short sellers were largely correct in their fundamental assessment of the company’s accounting and credit health.
While goeasy (GSY) spent months "categorically denying" the allegations of a short-seller "attack," today's update reveals that many of the specific "smoking guns" highlighted by Jehoshaphat Research have indeed materialized as significant financial problems.
Here is a breakdown of how the today's news validates the short sellers' original thesis:
1. The "Hidden Losses" are No Longer Hidden
Short Seller Claim: goeasy was masking $300 million in delayed credit losses.
Today's Reality: goeasy announced a massive $178 million "incremental charge-off" for Q4 2025 specifically related to the LendCare business, plus a $55 million write-down of interest and fees. This essentially admits that $233 million in value they were carrying on the books was uncollectible.
2. Validation of the "Accounting Wizardry" Allegation
Short Seller Claim: The company was using "accounting wizardry" and changing definitions to hide delinquencies.
Today's Reality: The company admitted to a "correction of a historical reporting practice" at LendCare. They revealed that customer payments were being recorded as "received" when they were actually still "in the process of being settled" (and some were never collected). This artificially lowered reported delinquency rates in 2024 and 2025—exactly what the short sellers alleged.
3. The Shift in Net Charge-Off (NCO) Rates
Short Seller Claim: Reported NCO rates were artificially low and the "true" rate was closer to 15%.
Today's Reality: goeasy has raised its expected 2025 NCO rate to 12.9% and warned that it will jump to the "mid-teens" in 2026. This is a massive departure from their previous guidance and aligns almost perfectly with the short sellers' projections.
4. Admission of Governance & Risk Failures
Short Seller Claim: The rapid growth in auto/powersports loans was a "time bomb" due to poor risk management.
Today's Reality: The new CFO, Felix Wu, stated that LendCare’s growth required "more robust operational infrastructure" and "enhanced credit risk management." The company is now drastically reducing originations in those categories—a move that effectively acknowledges the short seller's warning that this growth was low-quality and dangerous.
5. Drastic "Emergency" Measures
The severity of the situation is highlighted by the "6-Point Action Plan" goeasy announced today, which reads like a crisis management manual:
Dividend Suspension: Effective immediately, the dividend is cancelled.
Guidance Withdrawal: They have withdrawn all previous three-year financial forecasts.
Covenant Breeches: The company admits it will likely breech financial covenants with its lenders and is currently operating under an "accommodation agreement" (essentially a temporary truce with banks).
Conclusion
While the short sellers may not have been right about every single technicality, their core thesis—that goeasy was overstating its asset quality, understating its losses, and using aggressive accounting to mask a deteriorating subprime portfolio—has been vindicated by today’s news.
For investors, the transition from "Buy" ratings and denials to a total suspension of the dividend and a $233 million write-down marks a total collapse of management's previous narrative.
Q: What action will be taken in the growth portfolio in view of the recent announcement withdrawing guidance and suspending dividend? What is behind this announcement?
Q: Hi Everyone!!
With Goeasy running into significant issues, would Propel be quick to follow?
Cheers,
Tamara
With Goeasy running into significant issues, would Propel be quick to follow?
Cheers,
Tamara
Q: GSY is down 50% so far today, they cut their dividend, and they withdrew their expectations for 2026. Do you expect similar problems for PRL ? How similar are their businesses?.
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Brookfield Corporation Class A Limited Voting Shares (BN $53.70)
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Brookfield Wealth Solutions Ltd. Class A Exchangeable Limited Voting Shares (BNT $57.23)
Q: Has there been any material share buybacks in Brookfield Corp.during this steep decline
Q: Hi,
Down by quite a bit on these two about 35% in my TFSA. Asking what you would do knowing weights are personal.
Would you add to one or both?
Would you sell one or both?
Would you have them in equal weight? Right now I'm at 60% GLXY and 40% HOOD between the two with both combined at 3.5% of my whole portfolio. If not, what would be your suggestion.
Would appreciate your view. Thanks
Down by quite a bit on these two about 35% in my TFSA. Asking what you would do knowing weights are personal.
Would you add to one or both?
Would you sell one or both?
Would you have them in equal weight? Right now I'm at 60% GLXY and 40% HOOD between the two with both combined at 3.5% of my whole portfolio. If not, what would be your suggestion.
Would appreciate your view. Thanks
Q: What’s going on with BLK? Is it worth hanging on or should I sell?
Q: Brookfield Corp has fallen like an anvil…terrible performance.Any new insight?
Q: Could you provide an update on insider buying for Goeasy? In the past they seemed to personally get behind the stock.
Also, what does your gut say about the security of that 5.5% dividend? Are they over-leveraged or is there another key metric that could indicate things are a bit shakey? Thank you
Also, what does your gut say about the security of that 5.5% dividend? Are they over-leveraged or is there another key metric that could indicate things are a bit shakey? Thank you
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BMO Equal Weight Banks Index ETF (ZEB $58.35)
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Hamilton Canadian Bank Equal-Weight Index ETF (HEB $27.21)
Q: Is there any reason not to prefer HEB over ZEB? The two ETFs appear to be very similar while HEB seems to have a 0% MER and ZEB 0.25%. My online brokerage website also says HEB's yield is 3.06% while ZEB's is just 2.02%, though the reason why the yields are different is not apparent.
Q: Was the stock reaction over blown to the most recent quarter or do you think justified given the missed estimates?
Q: These two stocks have been dropping like a stone of late.
How do you feel about these two stocks in terms of risk/reward, and are these stocks approaching a support level where one can consider adding to their position?
Thank you and I look forward to your sage advice.
How do you feel about these two stocks in terms of risk/reward, and are these stocks approaching a support level where one can consider adding to their position?
Thank you and I look forward to your sage advice.
Q: Pls review Q results, guidance
Hold, sell, buy?
Hold, sell, buy?
Q: how close to a reality is the proposed CIX trading system and is it part of the reason for the weakness in X. what other reasons have contributed to the share price decline in X.
Q: what percent of poly market is held by ICE and would it be enough to move the value of ICE should poly market eventually go public thanks Richard
Q: Hello Team,
Could I have your opinion on Blue Owl please.
Many thanks!
Could I have your opinion on Blue Owl please.
Many thanks!
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Brookfield Infrastructure Partners L.P. (BIP.UN $49.82)
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Brookfield Asset Management Ltd. Class A Limited Voting Shares (BAM $59.81)
Q: In your opinion, which one will have provided a better total return in three years?
Q: Hi 5i,
Would you please comment the result and seem not that good. Does it relate to the new CEO? Please kindly advise the price to buy-in and the target price as well. Many thanks.
Would you please comment the result and seem not that good. Does it relate to the new CEO? Please kindly advise the price to buy-in and the target price as well. Many thanks.
Q: This question is more of a question on my method of reasoning... I have three what I consider " speculative " positions in my RRIF . SLVO a 3.85% position, GDXY an 11.1% position and GSY which has fallen 40% in price and is now a 4.25% position .... The first two I feel qualified to monitor world events and see the signs of selling. I'm in at a $3000 price of gold and bought SLVO at the same time ..... GSY is what concerns me . My reasoning is that though GSY reports on March 25 it is PRL that will swing the scales on March 2 ... { please correct me if I am wrong on those dates } .... I see the following scenarios .....
1} PRL beats the numbers and is either flat or a modest rise . GSY does the same .
2} PRL doesn't beat the numbers and drags GSY down with it . As both are in the dog house I'm thinking a lot .....
3} GSY once dropping below $100 drops like a stone ....
From a risk reward point of view please critique my reasoning and if it might be prudent to get out of Dodge before March 2nd ?
Thanks for your terrific service ......
1} PRL beats the numbers and is either flat or a modest rise . GSY does the same .
2} PRL doesn't beat the numbers and drags GSY down with it . As both are in the dog house I'm thinking a lot .....
3} GSY once dropping below $100 drops like a stone ....
From a risk reward point of view please critique my reasoning and if it might be prudent to get out of Dodge before March 2nd ?
Thanks for your terrific service ......