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Non-Tech : Creditrust Corp. (CRDT)
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To: Doug (Htfd,CT) who wrote (2)3/19/1999 9:01:00 PM
From: bgarner  Read Replies (1) of 11
 
Well I'm well aware that in the short term prices are determined by supply and demand. I really don't see CRDT as much different as CFS. They pay the highest prices for their deficiencies (aka CFS), they generate the vast majority of their income from securitizations that would not otherwise be successfull if not for an insurance company guarantee (what the hell are they thinking?), and their collection experience doesn't even come close to covering their costs. So the way I see it, they are as close to replicas as possible. Am I missing something? If the insurance company who writes the insurance on their securitizations ever decides to cease and CRDT is unable to get insurance elsewhere, I think the game is over. You think S&P or Moody's is going to give these things a rating approaching investment grade without insurance? I don't think they can possibly substantiate their stock price on contingency fees alone if they are unable to securitize going forward. If that ends up comming to fruition my guess is the stock is worth only a small fraction of where it trades now. But as long as the insurance company wants to insure the company's securitizations (I think they are insane, I was a professional bond analyst for 10 years, and they are setting themselves up for a big hit IMHO) the stock will stay where it is. I'm thinking this analysis is very accurate considering there is a similar one on a yahoo message board which scared the company so that its CEO had to respond on the board. I was shocked to see that, have never seen it before, and only indicates to me that things on the board similar to this analysis are hitting home. What do you think?
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