Credit Acceptance (NASDAQ:CACC) is a subprime auto finance company headed for a steep price decline in the medium term. The company is well run and I've owned it before, but it is in a notoriously difficult cyclical business and the fundamentals have been deteriorating for a while. This deterioration is not yet fully apparent in headline numbers, but if you look below the surface, the picture isn't pretty. In this article, I describe trends in the business and capital structure, the company's recent tender offer announcement, and discuss the difficulties in valuing a company like CACC. I conclude that longs should follow the Chairman and founder and cash out while they still can, and that the temporarily inflated...
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