FCFS seems quite expensive. Even taking into consideration of the CSH merger, I can;t make sense of the price level...any thoughts? Regardless, for folks who want to reduce their risk, they can always hedge their EZPW positions by going short FCFS.
thx junky...just saw it: "Our remaining shareholders have a put option with respect to their remaining shares of Crediamigo. Each seller has the right to sell their Crediamigo shares to EZCORP, through its 100% owned subsidiary, during the exercise period commencing on January 30, 2014 and ending on January 30, 2017, with no more than 50% of the seller’s shares being sold within a consecutive twelve-month period."
I'd like to see what the original agreement looks like that allowed them to put their shares at such a high price just prior to the valuation crashing. What a disaster of a trade. The original Mexican shareholders get out and the Austin guys are left holding the bag? Strange that such a business would deteriorate so quickly. Real money was lost here and a better accounting for it would be nice.
On September 1, 2015, EZCORP officially announced it had increased its ownership stake in Grupo Finmart to 94%. The purchase price for the additional 18% interest was $29 million in cash, thus giving Finmart a total market value of $161 million as of September 2015.
By 5/10/16, U.S. GAAP valuation of Grupo Finmart of $46.5m; Grupo Finmart non-cash goodwill impairment charge of $73.9m, zero goodwill remaining.
How did this investment deteriorate so quickly?
What did management miss when they made their additional 18% investment?
Please fill me in on the back story. I like the looks of EZPW, but this fact set needs explaining.