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Collector's Universe has been sold?
smokincoin
Posts: 2,631 ✭✭✭
If there is a thread here on the coin side that I may have missed, I apologize. I saw one on the sports cards page.
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smokincoin
Posts: 2,631 ✭✭✭
smokincoin
Posts: 2,631 ✭✭✭
Comments
Interesting.
10:34 AM EST, 11/30/2020 (MT Newswires) -- Collectors Universe (CLCT) said Monday that it signed an agreement, under which its outstanding shares will be acquired by an investor group led by entrepreneur and sports card collector Nat Turner, D1 Capital Partners, and Cohen Private Ventures for $75.25 per share in cash in a tender offer.
The cash tender will be followed by a merger in which any remaining outstanding shares of Collectors Universe will be converted into the right to receive the same cash price per share paid in the tender offer. The closing of the deal, which is expected in Q1 2021, is subject to certain limited and customary conditions, including the tender by Collectors Universe shareholders of at least one share more than 50% of Collectors Universe's shares and expiration or early termination of the statutory waiting period.
The price represents a premium of about 30% over the company's 60-day volume-weighted average price ended on Nov. 25.
The transaction represents fully diluted equity value of about $700 million.
Collectors Universe President and Chief Executive Officer Joseph Orlando will continue to lead the company, which will retain its headquarters in Santa Ana, Calif.
Collectors Universe's board, which approved the deal, recommends that all shareholders tender their shares in the offer.
Upon completion of the deal, Collectors Universe will become a privately held company and its shares will no longer be listed on any public market.
Shares of the company were up over 3% in recent trading.
Price: 74.95, Change: +2.40, Percent Change: +3.31
http://www.mtnewswires.com Copyright © 2020 MT Newswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.
not amazed this has happened it was just a matter of time before the CU was sold or merged with another company
Coins for sale at link below
https://photos.app.goo.gl/TyJbuBJf37WZ2KT19
@MsMorrisine Thanks Scott.
700 million!
Been nice knowing you guys.
I hope they keep the forum going. Otherwise, my quest to surpass Ricko in the post count will have all been in vain.
Similar thread on first page:
https://forums.collectors.com/discussion/1047659/is-anyone-else-riding-the-clct-train-i-dont-think-it-has-any-brakes#latest
I wondered why the stock has been steadily climbing. I thought it was because people were staying home maybe working on hobbies.
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@Catbert Thank you. It was disguised.
CU's business model seems to be a service related business. They charge prescribed fees to grade coins and other collectables for a fixed fee. I forsee that they perceive that grading fees are under valued and that they can share in the upside of grade inflation based upon price differential on grade reassignments. This will not be a stabilizing event for collectors.
OINK
As others have said, sure hope they keep the forum!!!
PCGS already does this, to some extent, on "regrade" and "reconsideration" via the "1% GP".
"If your coin upgrades, you will be charged an additional 1% of the final value of the coin in its final grade, this is referred to as the Guarantee Premium (the GP 1% would be in addition to the basic service level you select). If your coin does not upgrade, you will be charged the simple basic service level fee and any other fees applicable to your submission."
Source: FAQ > "What are the fees associated with the Reconsideration program?" @ https://www.pcgs.com/reconsideration
What if they switch to 20%-30% of the value increase? Would that be more than what they charge now in aggregate?
I suspect that this forum does not cost them that much money and is overall beneficial to their bottom line.
CN eBay
All of my collection is in a safe deposit box!
This could be a very positive development. Private companies are not hamstrung with reporting earnings that meet or exceed expectations every quarter. If the new owners want to spend considerable resources over a longer term to promote the hobby/hobbies, they can be aggressive and not worry about constant investor pressure for margin and profits.
These are sharp investors. Obviously they see tremendous potential.
I was suggesting that they will inflate existing grades (gradeflation) for a percentage of the increased grade value, plus the standard grading fee. For collectors this will devaluate all collections unless you pay the "regrade" + % fee. Could be like an excess tax on your collection by a TPGS. Think about it........
Of course.
Was not saying that PCGS would not attempt to "share" more in the financial gains of upgrades in the future.
Was merely highlighting the fact that a mechanism currently exists for them to do so.
Interesting points. Thank you for the detailed explanation.
I am not 'knowledgeable/experienced' enough to comment on gradeflation. That said, I believe that the GP on 'regrades/reconsiderations' represents a 'conflict of interest'.
In my mind, PCGS should just be charging the service level fee on 'regrades/reconsiderations'.
I wonder if the holder or label will change to indicate the change in ownership?
Probably not but will be interesting to see.
I can see the older slabs (rattler, OGH, pre-prong, etc) carrying a premium after an ownership change.
I sure hope the new owners don't replace Brett and Heather. They've been good for PCGS.
Worry is the interest you pay on a debt you may not owe.
No, CLCT has not been sold (yet). And considering that yesterday, the stock closed at nearly $2 above the offer price, the market’s saying there’s a possibility of a higher price at the conclusion of a transaction.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Is it? When we chase away newbie collectors who then go elsewhere, we could be hurting their reputation and bottom line.
All grading companies who tried to boost their bottom line with intentional grade inflation ended up destroying their reputation and their bottom line. I'm quite sure PCGS and their new ownership recognize this.
There is no value increase when you turn all of your 64s into 65s. The market simply reprices the 65s as 64s...or worse.
Change is the only constant... Of course some things will change, maybe. Be patient. Oh, I forgot, here I am telling coin collectors to be patient
Cheers, RickO
Private equity companies usually introduce aggressive strategy and cost cutting initiatives expecting to wring efficiencies that return significant profit before selling the company or taking public in a 3 to 5 year period. The status quo will not be maintained and I expect major changes.
The old PCGS Currency holders would be considered "crossovers" for the current PCGS Banknote holders.
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Excellent point about reputitional risk serving as a 'check' against intentional grade inflation.
Thanks for posting it.
ANACS and PCI are both pretty good examples of this.
ANACS used to be quite close to NGC and PCGS in pricing in the early days of slabbing. Now they are at more like 30-40% of PCGS pricing. And PCI..
It will be interesting to see what plays out. I have to wonder if the real beneficiary in the end will be their competition.
I imagine that smart guys like Cohen and D1 Capital are not in this as a cost play but more of a part of a broader portfolio play on alternative assets.
Cohen bought the Mets and has a massive art collection. Don’t seem to me to be the kind of people who in it as a tactical cost type play.
Latin American Collection
As I posted in the other thread, the company will likely have to maintain a 40-45% EBITDA. Only two ways of doing that: increasing revenue and decreasing expenses.
Many of the larger changes will depend greatly upon the philosophy of the investment group. No doubt, for the short term, most of the changes have already been agreed to before the MOU.
Will this impact us much? Probably in small ways. I don’t see any reason why the forum won’t be around. They will want to add more grading opportunities so I see more services and such offered. Maybe they will expand into some new areas like NGC with ancients. They may do more co-marketing with cutesy labels like other TPGs, etc. But I doubt they would do anything with the grading standards. That would be a huge mistake.
TurtleCat Gold Dollars
Maybe they’ll fix coinfacts.
I have several US gold coins in ANACS slabs that are properly graded. Please tell me where I can buy some more for 30% of PCGS pricing. Thank you.
Worry is the interest you pay on a debt you may not owe.
He didn't say that all ANACS coins trade at such discounts and I've seen quite a few that have. Not surprisingly, some types/grades are more likely than others to do so.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I wonder if they will also acquire NGC?
I'm largely referring to the sight unseen price. It is a market reality that PCGS/CAC coins tend to bring more than PCGS coins which tend to bring more than NGC with ANACS way behind. Sure, you can find an exceptional coin in an Accugrade holder and pay a premium to purchase it.
If you really think ANACS or PCI slabs bring the same money as PCGS, you should have ANACS or PCI do all of your encapsulating as they are more inexpensive, by far.
My gosh.... WHO would pay that much for a company that has ME as a Forum member?!!!!
Extremely unlikely. They are privately owned.
TurtleCat Gold Dollars
Maybe they will broaden the types allowed to be graded? Grading more types would increase income, no? Thinking Dan Carr's mintages? Or other independent minters? One can only hope,
He didn't say "all" but he didn't say "some" either.
Worry is the interest you pay on a debt you may not owe.
Thanks for the clarification. I do not buy coins sight unseen and I don't know any other collectors or any dealers that buy coins sight unseen. I'm sure there are some out there that do this but I don't know any. The coins I buy are already slabbed but if I wanted some inexpensive coins slabbed for authentication purposes or I just want them in plastic, I don't think ANACS or ICG would be an unreasonable choice. Not every coin is worth the high cost of NGC or PCGS slabbing services.
Worry is the interest you pay on a debt you may not owe.
Apologize if posted earlier.
Collectors Universe Inc., CLCT, -0.19% the Newport Beach, Calif., company that authenticates and grades collectibles and gems, said Chief Executive Michael Haynes was forced to sell company stock. The "recent turmoil in the financial markets -- combined with" Haynes's inability "to quickly access assets -- triggered the need to sell Collectors Universe stock related to collateralized loans" of his, the company said in a statement late on Thursday. "These sales were involuntary and related to personal planning objectives and the current extraordinary circumstances in the financial markets that triggered the need to sell company stock," Haynes said in the statement. "This event is in no way a reflection of my perception of the company." The statement didn't specify how much stock the executive sold.
Don't you just love "finance speak".
Glass half full folks. Service companies don't generally have gigantic cost efficiencies to trim. Trimming means service delays, that would be fatal in this case.
2 day turnaround times? They have the ability to make that happen now. No more Wall Street analysts.
They will have to increase margin and revenues.
Forum? Private company vs Public company, I'll put my money on Private.
That looks like a very old quote.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I thought he was referring to the cost of slabbing the coins, not the market price. I am fairly certain that ANACS is less expensive at slabbing than PCGS and NGC.
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