OUR NEW SHORT: $PRG We are short PROG Holdings Inc. (PRG), a US consumer finance company with a $2bn enterprise value and three key business units. Below is a summary of some of our forensic analysis and opinions about this company; for the full short thesis, including endnotes and our very important disclaimer about our financial interests and how they work, please see the Jehoshaphat Research website. 1) In our opinion, the opportunity to be short PRG exists mainly because of desperate underwriting and accounting actions taken by Management that are obscuring weakening demand in each of its three main business units. This has prevented analysts and investors from becoming aware of these problems (and led to misguided valuation analyses of PRG). The stock has few skeptics today, with little short interest and virtually no negative sell-side coverage. 2) PRG’s “crown jewel” business is Four, its highly valued BNPL property to which investors ascribe around half of the stock’s intrinsic value in sum-of-the-parts analyses. We have concluded that Four is playing games with its credit loss accounting; that these accounting games are being used to cover up increasingly desperate underwriting; and that this desperate underwriting in turn has been implemented to obscure falling underlying demand growth. Notably, the beginning of all these desperate actions appears to coincide with Four’s Co-Founder and CEO both leaving the company in 2025. We expect Four to negatively surprise investors on both credit losses and revenues due to its accounting aggression, underwriting changes, and misunderstood unit economics. The PRG bull case, which rests so heavily on Four, will be neutralized by shortcomings in this business unit alone. 3) PRG bought Purchasing Power for $0.4bn this year and has led investors to believe that it is a “low-double-digit” growth business. Based on interviews with former employees and document analysis, we conclude that Purchasing Power is more like a +2-3% grower that has been decelerating for many years, a perpetual disappointment to its former owners, and apparently a negative surprise to PRG after buying it. We believe that PRG has effectively misrepresented Purchasing Power’s past, present, and likely future performance and therefore will not achieve ambitious consensus expectations for it. Purchasing Power also has some surprising revenue dis-synergies with its new owner, meaning the business will likely struggle to achieve even its historical low-single-digit growth; let alone the low-double-digit nonsense modeled by the Street. 4) PRG’s legacy business is Progressive Leasing, a lease-to-own business in chronic decline. We believe this decline is intensifying at a particularly inconvenient time, when the Street is expecting an acceleration to sustained organic growth as high as 5% annually in this business unit. Progressive has attempted to offset these problems through overly loose underwriting, which it is just now pulling back from out of necessity; such tightening may “right-size” the business eventually, but we believe it will make it virtually impossible to hit Street expectations. The underlying problem at the Progressive Leasing business seems to be a groundswell of new competition from better-positioned alternatives, and our field research suggests that one result of this competition is that Progressive is being “demoted” by retail partners left and right while paying more to keep the ones it has. All of this is already happening, but on the horizon, Progressive Leasing – which relies on its size, retailer relationships, and brand to win business – is one of the consumer finance companies most vulnerable to would-be customers asking AI agents to choose the best deal, period, for them at the checkout counter. We always leave some of the more interesting things for readers of the full report, so we encourage you to visit our website and download the PDF of our short thesis, paying attention as well to our very important disclaimer. Comments and corrections welcome at our website or our email address.

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