here is some reading for DD.........
got this from Rueters news service.
Creditrust's Chief Executive Joseph Rensin said delinquent U.S. consumer debt is expected to reach
over $75 billion by the year by 2005, and noted that the company's growing presence in the bad debt
business may explain why the company's IPO did well in an overall weak IPO market.
The company's stock was trading Thursday at 16-1/4, after going public at $15.50 in a 2.5
million-share IPO.
The company had originally planned to sell the stock at a price between $13-$15, but the price was
later raised to $15-$17 because of demand for the shares.
Rensin declined to predict future earnings, though he pointed out the underwriter on the company's
IPO, Ferris, Baker Watts Inc., has said the second quarter's earnings per share could be as high as
around $0.50, up from last quarter's $0.07.
The company reported first quarter net income of $415,000, with $2.673 million dollars in expenses
and $3.403 million in revenues versus net income of $174,000 with $1.543 million in expenses and
$1.94 million in revenues the 1997 first quarter.
"About 15 of the largest 20 banks in the country are among our customers," Rensin said. "And we
have new banks call us every day to ask us to look at their debt portfolio."
According to Rensin, commercial banks choose to sell delinquent debt account portfolios to
companies like Creditrust, because "they are dead accounts" with no money to be made.
Creditrust buys these accounts from the banks "below face value," and it then becomes the party
that collects the owed money from the credit card holders.
The terms under which debtors have to repay the money is more lenient than the bank's conditions
and Creditrust's chance to get the owed money back while still making a profit.
"(For banks) it is like me giving you money for your trash," Rensin said.
For the near future, Rensin does not consider any acquisitions.
"Honestly, there are no good companies out there right now to buy," Rensin said. "I think at this
point we'll focus on the internal corporate restructuring."
Please do your own DD, this is a good starting place.
Also, check their web page!!
Opey |
