Citron Research has published a research report on Alliance Data Systems Corp (ADS US) today calling for a $100 price, down 50% from today’s $200.15. The main focus of the Citron report is the mischaracterization of ADS as a Business Services or IT company when actually most of its revenues are derived from credit card based banking transactions. Valuating ADS as a tech company nearly doubles its multiples and results in a $200/share price, by re-bucketing ADS into the Banking sector its stock price would cut 35% to 50%, according to Citron.
Short interest in Alliance Data has been dropping since 2013 when short interest averaged almost $1.8 billion. By 2015, average short interest was down 63% from its 2013 highs to $660 million. Short interest continued to drop in 2016, bottoming out in mid-May at $310 million and has consistently grown since then. ADS short interest is now $657 million, up $104 million in the 3rd quarter.
For more information on the above analysis, please contact:
Ihor Dusaniwsky, Head of Research, S3 Partners, LLC Ihor.Dusaniwsky@S3Partners.net
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