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Non-Tech : Providian Financial Corporation (NYSE: PVN)
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To: grinder965 who wrote (125)11/6/2001 1:44:05 PM
From: geoffrey Wren  Read Replies (1) of 167
 
How can one value PVN? Their cost of capital will go up, and so reduce their margins. I suppose they have relatively slim margins anyway, like a supermarket. If some large operation with good credit took over, they could keep cost of capital lower. Then the question becomes how much of the existing borrowing from the credit card accounts will be paid off. But buying for a takeover is always chancy, because usually there is no takeover, or it takes years, and by then things are worse.

I remember following RAD on the way down, and it kept ratcheting down and down before it hit bottom. It usually takes a while for a stock to hit bottom. For me this would be a trading play, maybe getting in around 1.5 if it gets there.
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