PRAA Shares Drop 4.8% Today: The Nexus Between Litigation Practices and Stock Prices

Portfolio Recovery Associates, LLC is a wholly owned subsidiary of publicly traded PRA Group, Inc. (Symbol PRAA). The price of PRAA was down more than 5% at today’s low. This brings the six months fall in price by 50.75%, according to Google Finance.

Hear what PRA leadership, Vik Atal and Pete Graham had to say at PRA Group’s Second Quarter 2023 Earnings Conference Call that precipitated the dump. Well, read the transcript on Yahoo Finance as an Insider Monkey Transcript. Please consider this your FREE Doc of the Day.

Some excerpts with commentary.

“Of note within the US we are not only benefiting from the increases in market supply…”

Loosely translated, PRA is profiting from the harsh economic times faced by ordinary Americans. School loans won’t be forgiven…great for PRA. Food prices skyrocketing. High fives all around. Prices at the gas pumps more than doubled since 2020. Let them drive electric. Ha Ha Ha Ha Ha.

“It is undeniable that [our U.S. business] is not performing to our expectations. [blah blah blah] It is essential that we generate more cash from our existing portfolio. To accomplish this, we are examining our end-to-end core processes with the goal of enhancing efficiencies, driving revenues and optimizing results. This work is already underway. And, as examples, we are in advanced discussions with select third parties to expand our outsourcing and offshoring capabilities.”

Oh good, send more jobs to India, because it is a whole continent of brown people just waiting to be exploited.

“We are also beginning to rationalize the capacity of our US collection sites with the announced closure of one of our sites last month.”

See preceding quotation.

“In parallel we are optimizing a range of customer interactions and revenue generating activities, including legal processes.”

So these guys (and gals) that call anyone who stands up to them in court litigious, are ramping up their win-by-default-lawsuit-mill.

One reader who I enjoy talking with reminded me of an off-topic conversation we had way back. We were discussing how people buy up warehouses full of clothes that didn’t sell by their manufacturers for pennies on the retail dollar price, then sell them in the garment district for whatever they can get. She called it the “rag business”. I told her my ancestors called it the schmata business.

Yes, yes, that is what PRA does; they collect schmata debt!

Back to the business at hand.

“During the quarter, we invested $144 million…”

I bought a cool book at a yard sale last week for a buck. It is the 1847 Student’s Reference edition of Noah Webster’s “American Dictionary of the English Language”.

The first definition of “invest” is “to clothe;” number 7: “To lay out money in the purchase of some species of property, usually of a permanent nature; literally, to clothe money in something; as to invest money in funded or bank stock; to invest it in lands or goods.”

To me, investing means putting money into capital, to produce goods or services.

What PRA means by investing is purchasing the promise to repay money that was used for consumerism. Nothing is gained. No product is made. No food is grown. No service performed.

Debt buyers claim they are infusing money into the credit card companies, so more people can borrow and more people can default. Weeee.

Does anyone really buy this shit?

Oh, ya, Judge Lee P. Rudofsky. X-General counsel to Wal Mart Inc., one of the schmata debt suppliers to Portfolio Recovery Associates, LLC.

[To be continued….]