Please help me understand…I’m a newbie in this area. I’m assuming Mr. Pabrai would not have made such an investment if he didn’t expect a significant ROI.

“At the same time, we have agreed to issue $10.0 million of convertible notes to funds managed by Mr. Mohnish Pabrai, one of our largest stockholders,” Mr. Miller explained. “The notes are convertible into an aggregate of 2.0 million shares of our Common Stock, at a conversion price of $5.00 per share. The exercise of most of the warrants and the issuance of all of the shares upon conversion of the notes are both subject to shareholder approval, which we intend to pursue in the near future.”

So Mr. Pabrai obviously thinks DFC @ $5 is a reasonable MOS and is certainly a discount to his original investment.

I wonder if he still thinks that, and if so, why wouldn’t he apply the Kelly Formula to risk a greater stake in the company?

Joe – I would be really interested in how you valuate DFC, especially since it fits in nicely with “Pabrai Week”.

Thanks.

http://www.gurufocus.com/ListGuru.php?GuruName=Mohnish+Pabrai

Since I respect Mohnish’s strategy I find myself wanting to invest in those same companies, especially since many of his investments are down 30-50%. For example, CompuCredit is down 34% since his investment one to two quarters ago.

http://www.gurufocus.com/StockBuy.php?symbol=CCRT

Now…how do I go about valuing a company like CCRT? I suppose I need to reread your thread on the subject.

http://www.fwallstreet.com/blog/50.htm

Thanks.