Rota Fortunae

Quavix - the financial hub for people, agents and data. Quavix Messenger @fridayfurnace
Everything here is my opinion. Do your own due diligence.

[Rota Fortunae @RFortunae]

@FletchFFletch82 well I was a day late and a dollar short there. Someone bought the shit out of $crmt at the close. Guess I'll hold for a while

[Rota Fortunae @RFortunae]

$crmt hired Adam Paul to run the special committee for restructuring. Paul is a career bankruptcy specialist. My research found that of 15 restructurings he was involved in, 8 were equity wipeouts and 4 were major dilution.

Further, the filing says that he will get paid $4,000 per day for outside normal board activities like being deposed or being a witness in court. And his indemnification will survive a bankruptcy preceding.

This does not look like an asset sale, this looks like distressed company that thinks BK could be a real possibility. Which is said because I was long this company for years before going short.

FYI could have seen this first on Quavix Messenger (https://t.co/QbOHDBSZAz)

[Rota Fortunae @RFortunae]

@FletchFFletch82 if $crmt does not close on a low, I will cover my position today. It has found its near-term home. Until further news comes out, its a bull/bear push/pull

[Rota Fortunae @RFortunae]

@FletchFFletch82 The hit will be the entire net receivables if im right. Which is essentially all of the $480m in book

[Rota Fortunae @RFortunae]

Sounds like you know better than most. Most recent ABS S&P has 35 loss rate expectation. 35% would not kill them if they didn’t have liquidity issues, but liquidity issues plus clothing, store, losing employees, etc. is all higher loss rates.

Again, I think anybody who is interested in this is not gonna buy the book at whatever the lost rates are. blob:https://t.co/wukbLVgaWM

[Rota Fortunae @RFortunae]

Also, my guess is that collections have gotten worse over the last month or two not only because of high gas prices but they’ve closed 40% of their stores when you’re trying to get people to come into the store to pay which is still a lot of the collections and you close the store that’s 10 minutes away and now the person has to drive 45 minutes and they get word that the business is struggling… that’s gonna cause collection issues $crmt

[Rota Fortunae @RFortunae]

@FletchFFletch82 Jeff fucked the business so hard during COVID. Hank was an operator, Jeff thought he could finance his way through it. Then they brought in current management and none of them have any experience in subprime lending or collecting.

[Rota Fortunae @RFortunae]

And I think you are still thinking about the receivables as not being levered in an ABS. The equity gets wiped out around 40% if you read the pre-sale docs on the ABS. After that the bottom tranche starts to get wiped out. That will be the negotiation with a buyer I think. Not about the equity but what services of the lower tranche

[Rota Fortunae @RFortunae]

1) this is not the same business/management as 08-09; 2) don't listen to what management says about the losses, look at the data. The ABS loss curves are all trending towards 35% and the most recent ABS transactions are actually getting worse and worse than 2024 which had a short improvement

[Rota Fortunae @RFortunae]

$CRMT

[Rota Fortunae @RFortunae]

I think the mistake that people are making on the BS is that they are assuming the book value is simply loan receivable - non recourse notes. But the receivables are in an ABS. My math, which is based on pre-sale documents on the ABS, says the equity is wiped out at ~40% loss rates. The company has BS reserver of 25% but has been routinely provisioning in the 40%'s (last quarter 47%). The ABS loss curves are all trending towards 35%.

So is there equity left? Maybe but not as much as people think. But the problem is really the liquidity. If they can't get financing, then they can't operate and if they can't operate then losses go up (it's a spiral).

Someone may be interested in buying the business and the loan book, but I don't think it will happen without a discount and as I laid out above there is not much room for a discount.

Just my opinion. We don't have a full view of all the data. But this math + hiring a guy with a rich past in bankruptcy restructurings is what drives my opinion.

[Rota Fortunae @RFortunae]

I think the mistake that people are making on the BS is that they are assuming the book value is simply loan receivable - non recourse notes. But the receivables are in an ABS. My math, which is based on pre-sale documents on the ABS, says the equity is wiped out at ~40% loss rates. The company has BS reserver of 25% but has been routinely provisioning in the 40%'s (last quarter 47%). The ABS loss curves are all trending towards 35%.

So is there equity left? Maybe but not as much as people think. But the problem is really the liquidity. If they can't get financing, then they can't operate and if they can't operate then losses go up (it's a spiral).

Someone may be interested in buying the business and the loan book, but I don't think it will happen without a discount and as I laid out above there is not much room for a discount.

Just my opinion. We don't have a full view of all the data. But this math + hiring a guy with a rich past in bankruptcy restructurings is what drives my opinion.

[Rota Fortunae @RFortunae]

X has become the town square of village idiots. So we built something better...

Quavix Messenger is built for professional investors who want signal without the noise — no bots, no engagement farming, no retail circus.

Private DMs. Invite-only groups. Finance-focused communities. A searchable professional directory.

Invite only. Request access: https://t.co/QbOHDBSrL1

[Rota Fortunae @RFortunae]

@TheNarrenschiff Classic https://t.co/dgSowm0vt9 situation

[Rota Fortunae @RFortunae]

On days like today, I always wonder who is stepping in to buy here $crmt

[Rota Fortunae @RFortunae]

@CapitalFang Volume picking up

[Rota Fortunae @RFortunae]

@BrianSheehy_ I know. I can’t believe how bad they messed up. It started with Jeff who became CEO (was CFO) before COVID. And then they put in a mgmt team with no subprime lending and collections experience. They all should be ashamed.

[Rota Fortunae @RFortunae]

To be fair, this was first flagged on @fridayfurnace our Friday afternoon 8-k ranker. https://t.co/dgSowm0vt9

It was only after the flag that the work was done and posted on Quavix Messenger

[Rota Fortunae @RFortunae]

$crmt hired Adam Paul to run the special committee for restructuring. Paul is a career bankruptcy specialist. My research found that of 15 restructurings he was involved in, 8 were equity wipeouts and 4 were major dilution.

Further, the filing says that he will get paid $4,000 per day for outside normal board activities like being deposed or being a witness in court. And his indemnification will survive a bankruptcy preceding.

This does not look like an asset sale, this looks like distressed company that thinks BK could be a real possibility. Which is said because I was long this company for years before going short.

FYI could have seen this first on Quavix Messenger (https://t.co/QbOHDBSZAz)

[Rota Fortunae @RFortunae]

@charles_moclub Yep. But it’s a pretty large garden.

[Rota Fortunae @RFortunae]

Good morning #fintwit

We just launched Quavix Messenger, a communications platform built for professional investors. Think of it as the ease of WhatsApp, the directory of LinkedIn, and the community conversations of old-school X—before the bots, spam, and noise.

We’ve already onboarded professionals across hedge funds, mutual funds, family offices, expert networks, RIAs, research firms, and the sell side, and we’re growing through invitations.

If you are (or were) in the business and are interested in getting an invite, shoot me a DM or you can request an invite and check out the platform at https://t.co/QbOHDBSrL1

[Rota Fortunae @RFortunae]

Ditch the bots and retail noise. The conversation happens on Quavix Messenger - the messaging platform for professional investors. (https://t.co/a7u7tU6JYJ) $INV

[Morpheus Research @MorpheusRes]

NEW REPORT: Innventure, Inc (NASDAQ: INV)

Innventure: The Latest Iteration Of A Decades-Long Grift Propped Up By A Fake 300MW Data Center Deal

https://t.co/VnP6IXXzPm $INV

(1/x)