Friday, January 02, 2009

Ezcorp Pawns Itself

EZCORP (EZPW) announced the completion of its acquisition of Value Financial Services. This on again off again deal finally closed on Dec 31, 2008. The deal has an interesting dynamic. A pawn shop has bought a pawn shop and then pawned itself to help pay for the deal. It’s all so Wall Street on a gritty level.

Value was privately held but had some market position. EZCORP had an excellent balance sheet and respectable cash flow and has now leveraged itself.

EZCORP says the deal will be mildly accretive in 2009. They did have to use a $40 million term loan. No details on the term loan were disclosed. There is also a $80 million operating loan. No terms were disclosed. So that’s $120 million of pawn and we do not know what the pawn ticket says.

Thursday, January 01, 2009

Navistar Continues to Strip Tease

Navistar (NAV) came out with some interesting information on Dec 30 at about 8pm ET. The headline reads Navistar Posts Near Record Fiscal 2008 Earnings Excluding Asset Impairment Charges, Despite Weak Truck Market. When you continue reading the press release you come across this tidbit of info.

“Navistar reported a loss for the current fourth quarter of $343 million, or $4.81 per diluted share, compared with a loss of $103 million, or $1.46 per diluted share in the fourth quarter a year ago.”

Just the day before Christmas they let us know that the inventory was incorrect and fortunately they had made an additional $50 million. Now the results are being released and the Q4 loss is 350% larger than last year. But hey wait until the conference call on Jan 5 to hear all the details. Seems to me we are experiencing the drip method of disclosure. One painful drop of acid at a time.

My prediction for the conference call will be that the explanations will have substantially more information than the press releases that they snuck out during the holidays. Where or when does disclosure governance kick in on this one?

Wall Street Art Work

Something different to start 2009. After all it’s supposed to be the year of change. Right Obama! A savvy friend from the artistic community after listening to what I was trying to do with the financial skeptic blog pointed out an artist called Geoffrey Ramsay who also has a blog called year of magical painting. He has developed an interest in unique portraits of high rolling corporate types. If I understand this correctly he allows the citizens to enhance the art work with their own comments. You can just imagine what some of the comments are. Anyway go to his blog at and then click my current portfolio.