Kanen Wealth Management LLC, a long-term shareholder owning over 1.5% of EZCORP's outstanding shares, sent a letter to the Board urging the immediate authorization and execution of a $100 million share repurchase program. The firm highlighted that the company had raised $300 million partly to settle convertible notes in cash but opted for an equity settlement in Q4 2024, which led to unexpected dilution as the stock price increased.
Kanen Wealth Management stated that EZCORP is in a strong financial position with excess cash and a fortified balance sheet, making it an opportune time for a buyback. The firm noted that EZCORP trades at a lower multiple compared to its peer, FirstCash, suggesting a credibility gap that could be addressed through a buyback.
The letter emphasized the urgency of the buyback to restore credibility and confidence among shareholders, employees, analysts, and the broader investment community. This shareholder advocacy aims to influence the company's capital allocation strategy.
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