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EZCORP, Inc. Message Board

  • jacosa jacosa Aug 30, 2011 12:10 PM Flag

    Cash Converters burp

    EZ won't be buying a controlling interest in Cash Converters, apparently because CC's home country of Australia is headed for strict-ish regulation of payday and similar loans. This means that the projected JVs either won't happen or will be different from the original announcement. EZ still has a substantial interest in CC, and still has the franchise for Canada.

    Pending further information, I don't exactly like this, but I'm comfortable with it. Majority-owned independent subsidiaries are trouble anyway (they needn't be as bad as Union Carbide India, but WOW; there was a gangrenous leg). Presumably, this is going to slow Worldwide expansion. That's a lot of potential money, but just maybe the Rothamel team can use the slowdown to grow into the task.

    Being me, I have to observe that this reduces near-term cash requirements.

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    • I gave 2 examples in which a company I knew well chose [generally] not to use futures to hedge predictable future actions. There are any number of such cases in companies I don't know as well. What I'm saying has nothing to do with legalities or logic. Simply as a matter of fashion, it doesn't seem to be the sort of thing that has been done for items of less-than-survival-determining size in the last couple decades.

    • $0.91 a share offer was looking very pricey.A stronger Aussie dollar than since March also makes the deal nearly 8% dearer today in US Dollar terms.Changes in dividend policy for Cash Converters shares and the potential for Aussie payday legislation have impacted Cash Converters share price performance.Time for Ezcorp to re- position.Very pleased with the stewardship in this regard.

 
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