NGC slabbed by Blackstone
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I work at a major investment firm and talk to Blackstone people often.
That is very interesting news.
"Besides Blackstone, new investors in CCG include Roc Nation"
looking forward to the new NJZ slabs
My understanding is the Blackstone is going to start collecting Mexican 8 Reales.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Wow that is big news !
Blackstone is I believe the world’s largest private equity firm.
Mark Salzberg did the right thing at the right time !
Symbol BX
I began buying shares at $13 per share.
Now 97.
Still own them
I give away money. I collect money.
I don’t love money . I do love the Lord God.
If they do I will hire you to help me negotiate the sale of my collection 😄🙏
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I acknowledge this is simplistic thought but sometimes it's best to start simple.
I don't think Blackstone bought NGC to start collecting Reales but I do think it's at least fun to ponder why they actually did buy them.
They must have seen value in the company. The question is: Where did they see the value?
Is it already built into in the company, waiting to be stripped away, or is it in some untapped potential that the company could execute on, or, perhaps execute on it in a way that is better than what they are doing now. I think the latter.
Nearly every company in the U.S. over the last 20+ years has sought out growth in China.
In the past 20 years the wealth creation in China has exploded.
Why wouldn't Blackstone be looking to tap a huge growth potential in the collectibles marketplace in China, of which one facet would certainly include coins, just as other companies have tried to tap into their respective markets.
I don't believe Blackstone purchased NGC because they are expecting unprecedented growth in the U.S..
In fact I would say that, outside the recent sports card boom, things have been pretty much steady in the collectibles market, not bad but not great either.
But Blackstone isn't going to invest without at least a strong expectation of growth and increased revenue. So where is that growth and revenue going to come from. Sure Blackstone could raise fees here but that only works to a point, after which the lower end of the market drops off and either makes it so lower end material doesn't grade, as it becomes less economically sensible to do so, or it causes that segment of the market to move to the next less expensive tpg, aka anacs. Either way, the fee increases only work in the short term. NGC is not PCGS.
I do think Blackstone will seek some increase the pricing structure here and perhaps they will look to expand the types of products they certify in the collectibles marketplace as well, however I think Blackstone must be looking at potential outside of the U.S. and for the past many years that has meant further expansion into Chinese markets.
Investment from Asia changed the real estate market in New York and L.A., as well as other select cities in this country, driving up prices. However, more recently there has been the suggestion that pressure is being put on those looking to invest here in the U.S. to put their money elsewhere, particularly to put it to use at home. Investors in real estate obviously wanted to make money on their investments but they also wanted to get some money out of the country. With new overseas billionaires increasing year over year I don't see why some wouldn't be enticed into the collectibles marketplace, with rare coinage being one of the possible collectables that would appeal to Asian markets, given that people there have long held a strong connection to precious metals.
Many U.S. collectors talk of the worn Morgan dollars they received from their grandmother that sparked their collecting interest. How many Chinese grandmothers have chop marked Reales in their cookie jars at home.
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Seriously, this deal probably has more to do with the company's move into sports card grading than anything involving coins. Not that I've actually heard that that's the case. Just seems obvious to me.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
There are far more sports fans than coin collectors, but don't know how many collect or buy anything sports related.
same thing happened at CLCT
https://www.globenewswire.com/news-release/2020/11/30/2136654/0/en/Collectors-Universe-to-be-Acquired-by-Investor-Group-Led-by-Entrepreneur-and-Collector-Nat-Turner-for-Approximately-700-Million.html
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Hmm, that seems a bit speculative - the sports card bit. More competitors for that market, but it seems a bit unstable to say the least.
I would expect their fees for coin submissions to rise, and IMO they are already high....
Well, just Love coins, period.
I agree with JohnnyCache, I think international coin markets are on the rise. Before, coin collecting was out of the picture for anyone who lived in a country with an average annual income of less than $1,000 (China 2002) (source: https://www.ceicdata.com/en/indicator/china/annual-household-income-per-capita). Coin collecting for people in these places at these times were just too expensive and costly for someone to get into. Fast forward to today, 2021, and people around the world are beginning to make more money, and that means more interest in numismatics. I think Blackstone sees China as a big part of their valuation for NGC's future, although I'm sure collector numbers are increasing in other parts of the "developing" world. (I'm a layman)
Here comes the big push to convince the rest of the world that coins must be certified! Think about how many submissions would be generated if the rest of the world is convinced of this and have the same opinion as the USA on certifying coins.
Scary. Just slab it all up says one who has with some guilt slabbed some coins....
Well, just Love coins, period.
There isn't any demonstrated correlation between increasing affluence and interest in coin collecting. It's a necessary precondition but not predictive.
There are multiple barriers to any increasing scale practically everywhere which most seem to ignore, including on this forum. A few countries (which are usually used as counterexamples) such as China and Russia might be or are exceptions but there is already more scale there than practically anywhere else.
Even if this was generally true, the lack of collecting in the past in most countries means there is little or nothing for these prospective collectors to buy, locally or anywhere else. Most of the better coins are usually owned by collectors elsewhere (US and Europe) and this supply is still often (very) limited. Limited to virtually no local supply to buy of the more preferred coinage and no local market to sell into. Collectors usually aren't going to spend any meaningful money on a hobby for which they have limited affinity especially where they have to buy from a distance and then repeat this process when selling. They just do not like it that much.
To give you an idea how limited the scale is for TPG outside the US, there are almost certainly more Morgan (and maybe Peace) dollars than all other crown sized coins worth grading combined. Maybe more for a single date like the 1881-S, excluding NCLT.
The supply is meaningful for Europe because the coins are usually at least somewhat common, but most of the coins aren't worth enough. The collector base isn't likely to increase sufficiently to change it meaningfully either, even under the assumption they change their TPG preference. No different than the large supply of US 20th century classic and modern coinage which is never going to end up in a holder either.
Look at how little success that has had to date. Going by the TPG data, it's meaningful for China, Australia, Canada, South Africa and Mexico.
Australia, Canada and China are predominantly NCLT. Mexico is predominantly by US collectors and presumably so is much of the volume for Canada. South Africa is predominantly NCLT and the Mandela coinage leading up to the 2011 bubble in the 2008 90th BD 5R. The rest of the world presumably is also mostly US collector submissions, though there are some exceptions I do not know.
There is no prospect for this to happen in a timeframe which will matter to anyone reading my post where collecting in other countries generally will come even close to the level of financialization in the US which is associated with TPG preference here.
Look at South Africa. The widespread adoption of TPG there starting around 2002 lead to a bubble which peaked in 2011 and the price level has since crashed. It attracted a disproportionate percentage of financially motivated buyers (exactly as it did in 1989 in the US) who had and have no interest in collecting and who inflated the price level above both the capacity and ability of the traditional collector to pay. I followed it in real time and know many collectors and buyers in that country.
South Africa is only an example but a model of what happens when a collector market becomes financialized. Maybe it will be different in China (It appears somewhat financialized now) but there is never going to be anywhere close to the same scale because the supply of economically gradeable coins is so much lower.
This is aside from the fact that collectors elsewhere don't find minor differences in quality represented by one point TPG label increments that interesting.
+1
This is something I have commented on many times in the past. It's a problem for the TPG model where the price level is flat or declines over long periods but the TPG firm's costs require them to raise fees, as has been happening to the US price level until recently since about 2008. This reduces the volume of coins worth submitting.
It's a "catch-22" since obviously, the price level cannot increase perpetually at a greater rate than the capacity or willingness of the collector base to pay. There is also a limit to how many low value but presumably high quality coins real collectors are willing to pay to have graded when it's an economically losing proposition.
Most collectors would rather spend their hobby budget on coins, not grading fees or any of the other expenses associated with the hobby which so many others seem to think every collector should want.
I agree. BX is on an IMMENSE buying spree as of late in any and all sectors - if the price is right, seize the moment.
At the least, that end of things is likely what drew Roc Nation into it. However, as an athlete named Andre, Iguodala is clearly in it for the coins.
Of course, things sometimes do change :-> . More and more and more, you're seeing slabs in overseas auctions and the Euro dealers' inventories (I was shocked by how much I saw even back at the Jan. 2020 NYINC). Whether it will work or not, but certainly a still relatively untapped global market (on both the coins and sports end of things) HAS to be part of the incentive here. The market for Chinese material keeps getting stronger and stronger... and, perhaps for an obvious reason, they like certified.
PS - RE: South Africa... they of course WERE one of the first countries to jump into slabbing pretty heavily (and a lot was clearly speculation). However, from a socioeconomic standpoint, they're kind of an oddball situation to compare other countries to. I mean, when you look at BidOrBuy and the sellers won't use the postal system and can only take PayPal if they use a British bank...
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Perhaps I'm wrong about the collectables market doing just average. Maybe instead, it's actually that I don't understanding the changes that have taken place over the past several years in the marketplace of "collectible things".
When I look at Items like the one below I find myself having a hard time grasping how these collectable items have emerged so strongly onto the marketplace, and command as much money as they do, particularly when compared to other much longer established items.
It's not that I can't see the "collectability" of these items, I certainly do. What surprises me has more has more to do with the valuation of these items.
I know, when boiled down to its simplest form, it's all still a matter of supply and demand and I can rationalize the limits of the supply side. However, despite what I see with my own two eyes, I struggle in my mind to imagine there are that many individuals who, not only have the financial resources, but also posses the inclination to drop over 100k on a video game cartridge.
Are these modern day equivalent of tulip bulbs? or Will there still be buyers of these items 30 years from now?
Can anything, if marketed correctly, be turned into a collectible in America? Maybe it's just different strokes for different folks and I'm getting old.
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There is a difference between change and any meaningful scale.
I agree it is presumably part of the business plan. This doesn't mean the volume will ever be meaningful, outside of NCLT and a low number of series or countries.
A rising price level doesn't mean there is any meaningful volume for a TPG to slab. China presumably has more volume potential than any country outside of Europe, even excluding NCLT. I presume that though the survival rate in better quality for the more preferred coinage is quite or very low, I infer they did have some tradition of saving things and the mintages must have been very large due to the population Probably some meaningful potential there but not in very many other countries.
I don't think South Africa is an outlier. I don't think the payment system limitation you describe really makes any difference to them because they aren't trying to buy coins of any value from anywhere else. There is a 14% VAT and unreliable postal service which discourages it, even assuming they want these coins which I believe they mostly do not.
What they do have is the infrastructure in place which most other countries lack. There is a collecting tradition which though less widespread than Europe, it's much more established than most countries. They have many dealers, their own local grading services, BoB as a distribution platform, local price guide and some local research. Most countries have little if any of that for a TPG to leverage. There is a lot more evident interest in collecting there than most countries too.
As for sports cards or anything else, don't know much about that. I infer that both acquirers of CU and CCG intend to expand into areas currently not covered by TPG though I do not know what that might be.
Video gamming is huge. It's a massive global business from the articles I read. I have never been into it but my nephew is and participates competitively. Probably a lot of current and prior gamers with some serious money now who might be interested in collecting obsolete or vintage product.
I think it's nuts but then, no different than the comments about my coins from some of those I know. When I showed my Gilboy reference to one of them, their response? "You need to get a life." Yes, really
https://people.com/human-interest/classic-atari-game-found-at-goodwill-in-north-central-texas-sells-for-more-than-10000-at-auction/
http://www.victoriancent.com
It's good to see that the funds raised through the sale are going to help a lot of people.
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No worries, just explain that the Gilboy book is worth more than a week's pay at Mickey D's... I will say though, I would be on the gamers' side in a battle of "Who's less geeky?" vs., say, VAM collectors.
Prescient comparison, anyway - did you all get the email several days from NGC's parent recruiting to start a Video Game division??
How is the NIB toy market these days? I'm guessing those get certified/sealed also?
About the sum of a nice house.....
Charles III Album
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Charles IV Portrait Set
Too bad the version I have is probably only with $8. Maybe a good breakfast sandwich.
CU buys WATA
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I tend to agree that it likely is more about Sports cards... sad but that is how it is unless and until a wave of intelligence hits the mainstream and I suspect I have a better chance of being struck by lightening first.
Experience the World through Numismatics...it's more than you can imagine.
Video games and non-sports trading cards are running very hot right now due to a combination of factors - partially because the entire collectibles market is getting a major bump as people seek to diversify in the face of inflation and high prices on stocks, but also because of fortunate timing as many of the franchises that these collectibles represent are entering into the period where more and more of the original players have high levels of disposable income. Franchises such as Magic: The Gathering saw particularly early growth because of demographics; it was always a game for us nerds, nerds who tended to be higher earners later on in life based on technical interests. Now cards like the Alpha Black Lotus that raised eyebrows at 10k a few years back are six figures, but now similar interest has arisen in related materials.
The greatest growth is seen in areas with major long-term viability, particularly franchises with decades of success behind them and sustained popularity in the modern day. It's the difference between Action Comics No. 1 being the most valuable comic as the first appearance of Superman, vs. random Golden Age heroes that never went anywhere (coupled with genuine rarity, conditional or absolute). It's why that Legend of Zelda game was so pricey - exceptional condition, a particularly early variant, and featuring a franchise that has been internationally popular for more than 30 years.
Another factor is simple fad mentality, exacerbated by the pandemic. People were sitting at home with little to do, and a couple of influential streamers made Pokemon cards the new thing, cracking open original first edition packs on stream. The enduring popularity of the franchise today coupled with a sense of nostalgia from the 20-somethings spurred massive interest, and prices of both individual cards and unopened boxes have skyrocketed; it's not unreasonable to say that the engagement has spilled over into similar areas of 'geek culture'. What we're seeing now is comparable to the runups in vintage midcentury toys and classic comic books in the '80s, though time will tell if the present popularity for certain genres will fade or grow stronger as some of the franchises die off, and popular focus shifts away from just the acquisition of such pieces by others.
Coins are much more of an established collecting area, and don't benefit from many of the same factors. From a perspective of returns exclusively, it's hard to put big money into a collecting area with a rapidly aging collector base and not a lot of new blood showing active interest.
I really enjoyed reading your post and I thinks it's a well thought out assessment of what we are currently seeing in the collectables marketplace.
I have a passion for coins and that's why I collect them, I wouldn't mind getting a return on my investment but that was not my objective from the onset and it still remains in second place to my goal of assembling a set that makes me happy.
However, with the growth seen in other areas of collecting I would like to, as I imagine everyone else would too for that matter, investigate the potential for making some select acquisitions in some of these growing collectables markets. The thing is, I can't, by myself, yet distinguish what items will be winners and what items will be losers. It's like I feel as if there is opportunity right in front of me and yet at the same time I can't see what it is.
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I’ll stick with an established area like coins. Heck, I’ve never heard of Legend of Zelda until last week. And literally have no clue what to do with a Pokémon card.
There are certainly opportunities, but all around virtually every market has a lot of speculation at present. Much of it is essentially a bet on what will remain popular into the future, or what might emerge in the meantime. Once you select a particular property, the rules are very similar to numismatics if you're looking for long-term returns - rarity, desirability, and condition.
If you want to focus on rarity and base your purchase in an established property, a sample that I would use of something available today is a set of rare 'Gamma Playtest' Magic: The Gathering cards at Heritage. They're from an established series, but are particularly rare prototypes that haven't had the chance to become features of that collecting world. Alternatively, instead of prioritizing rarity, you could hop on pure popularity - condition examples of first edition Charizard cards or Amazing Fantasy #15 (Spiderman's debut) are both very likely to remain popular for many years but come at a higher price in the short term.
On emerging collectibles, it's all about predicting new trends, much like the speculation in incoming rookie stars across all sports (specialty card issues associated with top draft picks selling for big money before they put on a uniform or step on the court). For such a success story, materials associated with the 'Guardians of the Galaxy' were once completely overlooked, until Marvel incorporated them into the MCU with some highly successful films that saw massive spikes in the original comics. There's a lower ceiling for entry if you get in early on stuff like that, but less likelihood for success and greater risk.
Gretchen Morgenson has a recent book out on these private equity firms, a good interview: https://www.zerohedge.com/news/2023-08-14/gretchen-morgenson-our-economy-being-plundered-wall-street-elites
The funds that buy out companies such as NGC and PCGS, in the long run do not make real improvements, but are parasitical, mine their assets and then resell them 5-7 years later or do an IPO.
Maybe I have a bad memory, but I can't name any new features that PCGS or NGC have added to their coin biz since the PE acquisitions. Maybe they are being starved of R&D funding in lieu of other parts of the biz?
For NGC, NGCX which is meaningless to most of us. And the new QR code, which is just ongoing security to keep ahead of scammers. Nothing new otherwise.
For PCGS, nothing new in the coin arena.
Lots of improvements and investments on the PSA side. PCGS is an afterthought to the strategy I would guess. Hope it doesn’t die on the vine with the focus on sports cards.
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You don't count the additional waiting time for submissions turnaround an added feature?
LOL! I have two regular world subs received 03 May that were in grading for WEEKS. They are currently in encapsulation for many more WEEKS. Seriously, this has become ridiculous.
NGC right after the acquisition made customer service generic across all connected companies. Prices went up.
Sort of fun when a somewhat older thread resurfaces... gives people a second chance to look back
Experience the World through Numismatics...it's more than you can imagine.
Like looking back at the more active activity on this message board?
Personally, I don't follow NGC prices like I do PCGS. But I did need to send an order there earlier this year and found their prices excessive and policies convoluted (not to mention their poor photo vision+ service). PE has done nothing to fix any of this. Due to this, I will only use them as a last resort.
Boosters (@Rexford I'm looking at you) may poo-poo this assessment, but if it's happening with me, it's undoubtedly happening with others who submit even less than me. So it's a problem even if they refuse to acknowledge it.
The level of activity is measured by the degree of controversy... Plain and simple
Experience the World through Numismatics...it's more than you can imagine.
I have found just the opposite. I find them very flexible and very easy to submit to and the cost is less than PCGS. In my experience that is. Tell us more about your submissions and then let’s compare services. I also do not have any problem with their photo vision+. Sorry to hear you are a dissatisfied customer.
Fair enough. But I didn't really want to derail this discussion of PE to the pros/cons of NGC. I have quite a few NGC coins, and even some I have submitted myself. But they have become my second choice.
Last submission:
Mexico 5c struck in gold. Price estimate $2500.
(I took a guess that I needed mint error service on this coin because if I didn't, NGC would just return it without service and I would be back at square one.)
NGC Cost:
Grading fee (regular): $40
Scratch resistant fee: $5
Mint error fee: $18
Imaging fee: $8
Handling fee: $10
Total fees: $81
PCGS Cost:
Grading fee (regular): $38 (includes gold shield, TrueView, mint errors on world coins)
Handling fee: $10
Total fees: $48
I have excluded return shipping fees because I did send other coins in the shipment. I do like that with NGC, you can specify to ship orders together to save on shipping costs. This is a big plus, but does not offset the negatives.
Prior submission (that I ended up sending to PCGS instead of NGC):
France 1842 Establishment of the Railway Lines Medal Cu (with provenance). Price estimate $500.
NGC Cost:
Grading fee (regular): $40
Oversize fee: $20
Pedigree fee: $5
Imaging fee: $8
Handling fee: $10
Total fees: $83
PCGS Cost:
Grading fee (regular): $38 (includes TrueView and pedigree)
Oversize fee: $20 (and due to Quarterly Special, it was only $10)
Handling fee: $10
Total fees: $68 ($58 due to Quarterly Special)
Since I prefer the PCGS holder, and since I am always sending orders to PCGS, sending the above medal to PCGS was a no-brainer.
PhotoVision+ photos are hosted on a separate (Microsoft) website and not integrated into the NGC ecosystem. You have to download them within 30 days because they are deleted after that.
For most of my submissions comparisions:
NGC:
Grading Fee standard world Gold $35
Vision+ imaging $8 (or $5 for internet imaging)
Handling Fee $10
Total: $53 (or $50 with internet imaging)
PCGS:
Grading Fee regular $40
Gold Shield Fee $5
Handling Fee $10
Total: $55
>
Images from NGC’s premium coin photography service are now available through the Verify NGC Certification tool on NGCcoin.com
https://www.ngccoin.com/news/article/11780/
I prefer NGC over PCGS for Mexican modern coins. NGC is stricter on grades. Even then, grading inflation is on the rise. For example, NGC began handing out 68s like candy for thick 1980s silver Libertads. QC was close to non existent in Mexico back then. Now they began handing out 69s. I’ve seen two of the 1985 MS69s and one of them looked like trash. The other one was impressive relatively speaking for a 1985 but not at all a 69 for modern standards. The other thing with NGC is toners almost always get Artificial Toning designation of silver Mexican coins. PCGS straight grades toners much easier BUT there is something to be said about toners. There’s way too many making the rounds on auction and other sales sites for them to be natural. Someone is cooking them up via some scientific method. For this, I won’t buy any at a premium at all.