Alternative lender Goeasy Ltd. GSY-T says it categorically denies and refutes the findings of a short-seller report that suggested the company is under-reporting credit losses.
The Mississauga, Ont.-based company behind the Easyfinancial brand says in a news release that it remains confident in both the quality of its consumer loan portfolio and the sustainability of its business.
Short-seller Jehoshaphat Research put out a report Monday saying it believes the subprime lender has some $300-million in “improperly delayed” credit losses as well as serious delinquencies buried in the balance sheet.
The research firm, which is betting that Goeasy’s share price will go down, says it believes the lender’s net charge-off rate for bad loans should be closer to 15 per cent, rather than the nine per cent the company has reported.
Goeasy says the report is a “false and malicious short attack” and that it reaffirms its most recently issued guidance.
The lender’s share price dropped more than 15 per cent on the day the report came out and it remains down around 11 per cent.