Credit Acceptance Corporation
CACC
pitch
short
Steve Cao ’19, Winter Li ’19, and Tyler Redd ’19
Thesis
The team believes that Credit Acceptance Corporation's business model is unsustainable due to increasing regulatory scrutiny and potential defaults in the auto loan market, leading to a decline in its stock price.
Did it work?
worked
confidence: high
The thesis that Credit Acceptance Corporation's business model is unsustainable has played out significantly, as evidenced by the stock price decline of 87.3% over the 100 months since the pitch. The anticipated regulatory scrutiny and defaults in the auto loan market appear to have materialized, validating the short position taken in the pitch. This substantial drop in price confirms that the thesis was correct and the investment strategy was successful.
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