Why EZCORP (EZPW) Stock Is Falling Today

NEW YORK (TheStreet) -- EZCORP (EZPW) was falling 1.8% to $11.69 Wednesday after pricing a private offering of $200 million of cash convertible senior notes due 2019.

The senior notes were offered in a private offering, and initial purchasers were given the opportunity to buy up to an additional $30 million aggregate principal amount of senior notes.

EZCORP expects net proceeds of about $193 million from the offering. The company will use $11.9 million to repurchase chafes in privately negotiated transactions, about $115 million to pay off existing borrowings, and about $18.5 million "to fund the cost of entering into the cash convertible note hedge transactions." The rest of the proceeds will be used for general corporate purposes.

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TheStreet Ratings team rates EZCORP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate EZCORP INC (EZPW) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

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