CONN’S, Inc.(NASDAQ:CONN) is plunging yet again this year, down by over 36% in early market trading. The stock has wiped out all its gains and then fallen some more. Conn’s was trading at $22 in pre-market. expanding its total loss for the year to 70%.
Einhorn down 40% on CONN’s
David Einhorn’s Greenlight Capital is the second largest holder of Conn’s according to third quarter 13f filings. The fund holds 3.5 million shares of the company and mentioned in its Q1 letter that the position was acquired at an average price of $35.49. So far Greenlight has sustained a 40% loss on its position in Conn’s. Even though Einhorn is one of the largest holders of Conn’s, the position is not big compared to his firm’s entire portfolio. Greenlight Capital had a great run in November, as it took in a gain of 5.5%, bringing up its YTD gain to 11.3%.
Conn’s provides retail sales and delivers consumer electronics to customers through its in-house credit program. Earlier this year, the company’s stock was punished after the company announced less than satisfactory second quarter earnings.
Conn’s withdraws profit guidance
This time the loss has come after CONN’S, Inc.(NASDAQ:CONN) posted yet another quarter of dismal performance. The chief financial officer of the company, Brian Taylor, has also stepped down. Conn’s reported a total loss of $3.1 million, amounting to 8 cents per share for the third quarter. The company has also withdrawn its profit guidance for FY2015.
The company’s major losses came from its credit-financing business. Conn’s has announced plans to bring further changes to its management as well. The chief accounting officer, Mark Haley, will temporarily fill in for the CFO position at Conn’s.
Einhorn expected 15-20% growth
In his Q1 letter, Einhorn was predictably optimistic about the company. The hedge fund manager said the stock had the potential for a 15-20% unit growth. Regarding CONN’S, Inc.(NASDAQ:CONN)’s stock decline after reporting 4Q2013 earnings, the letter said the market has a tendency to overreact whenever any deterioration in sub-prime credit is reported. At that time, shares fell from $79 to $32, it seems the overreaction to such news has only worsened in the case of Conn’s. With repeatedly missing earnings forecast and increasing credit losses, this is the third time the stock has taken a steep fall this year.
Luxor and Kerrisdale also lose in Conn’s
The largest holder of CONN’S, Inc.(NASDAQ:CONN) is the low-profile Luxor Capital. The hedge fund owns nearly 7.6 million shares of the company, of which 4.64 million were added in the third quarter. Sahm Adrangi’s Kerrisdale also holds a small position in Conn’s. Kerrisdale bought 45,000 shares of Conn’s in the third quarter. Other holders of Conn’s include Ivory Investment and Oxford Asset Management.
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