Providian Financial Corp.'s stock lost more than half its value Friday amid worries that the once thriving credit card company has fallen into an insurmountable hole.

The selloff followed a shake-up Providian outlined after the market closed Thursday. Longtime Providian CEO Shailesh Mehta announced his resignation and the company disclosed plans to scrap its business of giving credit cards to high-risk, or "subprime," consumers.

The company also slashed its earnings estimates for the fourth quarter and warned that the worsening losses in its $32.2 billion credit card loan portfolio made it too difficult to predict its results in 2002.

The news left Wall Street wondering how far the company might fall from just last year, when Providian earned $651.8 million on nearly $6 billion in revenue, and its stock peaked at $66.72.

In a move that will make it more expensive for Providian to raise money, Fitch Inc. on Friday downgraded Providian's credit rating to junk status, citing "the rapid deterioration in the company's franchise."

Shares of the San Francisco-based company plummeted $7.41, or nearly 60 percent, to $4.99 in afternoon trading Friday on the New York Stock Exchange.

Some analysts predict Providian will be sold to a healthier rival interested in picking up the company's 18.5 million accountholders at a discount. The question is how much the battered company is worth, given that not even its own management seems certain about how badly its loan portfolio might deteriorate.

"People with sharp pencils are trying to figure out the breakup value of the company," said industry analyst Charlotte Chamberlain of Jefferies & Co.

Providian's management believes it can salvage its business by shifting its focus to the more stable mass market of consumers with solid credit ratings. In doing so, Providian will run into plenty of entrenched, healthier credit card companies, including Capital One Financial Corp., MBNA Corp. and Household International Inc.

Analysts aren't convinced Providian is savvy enough to compete in the mass market, particularly since a recent expansion into the premium, or "platinum," credit card market didn't generate the returns it expected.

"It's sort of like me thinking I could sing like Madonna just because I go out and buy a pointy bra and some fishnet stockings," Chamberlain said.

Providian also told analysts Thursday that it is prepared to slash expenses, raising the possibility of layoffs among the roughly 13,000 workers that the company employed as of Sept. 30.

Providian emerged as the nation's fifth-largest issuer of bank credit cards by developing a computer model that zeroed in on subprime consumers who were willing to pay higher rates and more fees for additional services. The formula turned Providian — once part of a Kentucky life insurer — into an investor favorite and won Mehta, the company's CEO since 1988, industry acclaim.

The company's aggressive marketing tactics landed Providian in trouble with government regulators last year. Facing accusations it had gouged customers with unnecessary fees, Providian agreed to pay more than $400 million to settle with government agencies and consumers represented in class-action suits.

At its peak, Providian had a market value of $19 billion. After Friday's selloff, the company's market value stood at $1.5 billion.