EZCORP Acquires 11 Nevada Pawn Shops

By: TraderMark Monday, September 08, 2008 1:32 PM

Article Author

Bio and Articles
Author's Website

Vote for next session

The next market session will close:

I guess EZCORP (EZPW) is considered a financial since it is flying this morning - or perhaps it's this news. Either way I am going to take this opportunity to cut the position by 1/3rd, selling in the $16.60s on the "gap up". We're reducing from a 2.4% stake to 1.6%.

Ezcorp Inc., which makes pawn and payday loans, said Friday it will buy 11 Nevada pawn shops operating under the Pawn Plus and ASAP Pawn brands in a $34.5 million cash-and-stock deal.
The transaction includes about $6.6 million in pawn loans, $2.2 million of inventory, $1.2 million in auto title loans and the remaining operating assets of the stores. Ezcorp said it will pay for half of the acquisition with cash and the other half with Class A nonvoting common stock.
President and Chief Executive Joe Rotunda said in a statement that the shops, which are located in Las Vegas and Henderson, Nev., will complement its four existing Las Vegas stores.
The company anticipates the shops will add 5 cents to 6 cents per share to its fiscal 2009 earnings.

Remember, this stock lost over 20% of it's value when it walked away from a deal that would of added 1 CENT to its quarterly EPS and full year EPS. (Aug 11: EZCORP Down 8% on Termination of Value Financial Deal) Therefore if the market were logical, a deal adding 5-6 cents should increase the value by $20% x 5-6 = 100-120%. Somehow I doubt that ;)

(Jul 24: Cash America (CSH) and EZCORP (EZPW) Both Report Today - Starting Small Stake in EZCORP)
(Jul 10: Another Payday Loan/Pawn Shop Breaks Out on Higher Guidance - A Trend Seems to be Afoot)
(Jul 7: Missed Opportunity in Cash America)

Long EZCORP in fund; no personal position

Bookmark:
Email
Print

The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.

Related Stories