Credit Acceptance Corporation
Thesis
Credit Acceptance Corporation is recommended as a short due to projected EPS decline driven by flat growth in new loan originations, a declining yield, and increased provisions for credit losses. With a target price of $210, the stock presents a favorable risk-reward scenario with significant downside potential.
Did it work?
The short thesis on Credit Acceptance Corporation played out decisively: the stock declined 89.5% since the pitch, a move far exceeding the stated $210 target's implied downside and consistent with the projected EPS deterioration from flat originations, declining yields, and rising credit loss provisions. Regardless of the unknown elapsed time, a decline of this magnitude decisively confirms the bearish thesis rather than representing interim noise.