Shareholders, are you happy with dilution?

[TeemuVanBasten 3,327]

Issuing new shares for the Americans to purchase is one way to get money into the club, but it means you all own less of the club in the process.

Does this bother any of you?

Alternative of course would be for Attanasio to acquire his shares from existing shareholders and then provide a capital injection through a loan.

Feels to me like existing shareholders should at least have the option to increase their shareholding to consolidate or increase their share of the club.

Many/most won't take that option of course, and all of those people would still then be diluted, but if there is a new share issue then all shareholders should be given the opportunity to participate?

Edited January 29, 2023 by TeemuVanBasten

[littleyellowbirdie 2,551]

13 minutes ago, TeemuVanBasten said:

Issuing new shares for the Americans to purchase is one way to get money into the club, but it means you all own less of the club in the process.

Does this bother any of you?

Alternative of course would be for Attanasio to acquire his shares from existing shareholders and then provide a capital injection through a loan.

Feels to me like existing shareholders should at least have the option to increase their shareholding to consolidate or increase their share of the club.

Many/most won't take that option of course, and all of those people would still then be diluted, but if there is a new share issue then all shareholders should be given the opportunity to participate?

Issuing new shares is not subject to FFP rules, since it's a legitimate way of raising capital, which is why it's beneficial to use this mechanism. A capital injection that wasn't via a shareholding would still have to be balanced according to FFP, which significantly limits the value of the injection.

Issuing new shares also dilutes Smith and Jones shareholding. Conceivably, fan shareholding could end up holding the balance of power between the Attanasios and Smith and Jones if there's disagreement between them, which would be more influence held by fan shares than they have currently.

But in any case, if a company chooses to issue shares, then existing minority shareholders don't get a say in that in the face of the wishes of a majority shareholder. Mind you, no idea why this should need explaining to a former banker .

Edited January 29, 2023 by littleyellowbirdie

[TeemuVanBasten 3,327]

3 minutes ago, littleyellowbirdie said:

Issuing new shares is not subject to FFP rules

We aren't in danger of breaching FFP limits, have to be in the same league for 3 consecutive years for that to become a problem for a start. 

[littleyellowbirdie 2,551]

1 minute ago, TeemuVanBasten said:

We aren't in danger of breaching FFP limits, have to be in the same league for 3 consecutive years for that to become a problem for a start. 

We could easily be if we're going to have a go at seriously upgrading the squad in terms of both transfer fees and salaries in a serious bid for Premier League consolidation.

The first thing the Attanasios did at the Brewers was looking at making player salaries more competitive to attract better players.

[TeemuVanBasten 3,327]

7 minutes ago, littleyellowbirdie said:

But in any case, if a company chooses to issue shares, then existing minority shareholders don't get a say in that in the face of the wishes of a majority shareholder. 

What's the point in the General Meeting on the 13th February then.

[PurpleCanary 5,562]

17 minutes ago, TeemuVanBasten said:

Issuing new shares for the Americans to purchase is one way to get money into the club, but it means you all own less of the club in the process.

Does this bother any of you?

Alternative of course would be for Attanasio to acquire his shares from existing shareholders and then provide a capital injection through a loan.

Feels to me like existing shareholders should at least have the option to increase their shareholding to consolidate or increase their share of the club.

Many/most won't take that option of course, and all of those people would still then be diluted, but if there is a new share issue then all shareholders should be given the opportunity to participate?

For fans who have a few shares, and even those with a few thousand, what in practical terms is being diluted? If these  were shares bought in a listed company it would be a different matter.

[TeemuVanBasten 3,327]

1 minute ago, littleyellowbirdie said:

We could easily be if we're going to have a go at seriously upgrading the squad in terms of both transfer fees and salaries in a serious bid for Premier League consolidation.

The first thing the Attanasios did at the Brewers was looking at making player salaries more competitive to attract better players.

My understanding was that loans from a director (the alternative to issuing new shares) was a workaround for FFP.

They can be used to offset losses, that's how Tony Fernandes did it at QPR, by injecting more cash as a loan.

[littleyellowbirdie 2,551]

1 minute ago, TeemuVanBasten said:

What's the point in the General Meeting on the 13th February then.

It's a legal formality as a company with shareholdings.

Interesting Brewers perspective on Attanasio.

https://www.brewcrewball.com/2014/8/8/5982487/mark-attanasio-brewers-mlb-commissioner

[TeemuVanBasten 3,327]

Just now, littleyellowbirdie said:

It's a legal formality as a company with shareholdings.

Interesting Brewers perspective on Attanasio.

https://www.brewcrewball.com/2014/8/8/5982487/mark-attanasio-brewers-mlb-commissioner

I don't need to read a Brewers perspective on Attanasio as I already like him.

[littleyellowbirdie 2,551]

5 minutes ago, TeemuVanBasten said:

My understanding was that loans from a director (the alternative to issuing new shares) was a workaround for FFP.

They can be used to offset losses, that's how Tony Fernandes did it at QPR, by injecting more cash as a loan.

I don't remember the details, but I remember a QPR-supporting friend telling me QPR were in line to be sanctioned by the EFL for breaches of FFP rules the season they were promoted with Redknapp and only got away with it because promotion put them out of the EFL jurisdiction for sanctions.

I'll ask him about the details again when I see him.

Edit: Actually, they were fined as a result of Fernandes writing off loans. https://www.eurosport.com/football/qpr-facing-heavy-fine-after-challenge-to-efl-s-financial-fair-play-rules-fails_sto6379427/story.shtml

Edited January 29, 2023 by littleyellowbirdie

[Thirsty Lizard 3,165]

In answer to the original question - yes, I'm quite happy for my shareholding to be diluted. 

[littleyellowbirdie 2,551]

2 minutes ago, Thirsty Lizard said:

In answer to the original question - yes, I'm quite happy for my shareholding to be diluted. 

I must say, I'd quite like a shareholding if I could get one, just for the fun of it. Been toying with the idea of joining the Canaries trust as a half-way house.

[MrBunce 245]

It doesn't bother me and it needn't bother you. It's outside our control and perfectly legal. 

[TeemuVanBasten 3,327]

19 minutes ago, MrBunce said:

It doesn't bother me and it needn't bother you. It's outside our control and perfectly legal. 

I'm not saying I'm particularly bothered or questioning the legality.

But I think a scheme which gives existing shareholders an exit opportunity (the chance to sell out in this 'round' at whatever price per share he'll be paying) would be preferable, considering a lot of shareholders dug deep the bail the club out, and paid for Huckerby.

I don't think many would take the opportunity to dispose, and it would be a fraction of the total shares acquired, but it would be a decent gesture and I'm sure there would be a few who would welcome the dollars in trying times, or those who haven't got kids to pass their shares onto.

Anyway, will be interesting to find out the extent of Delias dilution and the level of new money it brings. 

Clearly we'll need rebuild capital if we don't go up, Aarons sale alone not going to pay for the surgery we will need, particularly with Pukki likely off.

Edited January 30, 2023 by TeemuVanBasten

[PurpleCanary 5,562]

But you do have an exit opportunity. If Attanasio gets to 30 per cent, as seems very likely, then he is forced to offer to buy your shares and has to buy if you decide to sell.

[Newtopia 517]

I am fine with it, in theory the additional cash for the club  should equate to the value of the additional shares.   If it all goes wrong my shares become value less anyway.

[dylanisabaddog 4,931]

6 hours ago, littleyellowbirdie said:

I must say, I'd quite like a shareholding if I could get one, just for the fun of it. Been toying with the idea of joining the Canaries trust as a half-way house.

Post on here to see if anyone wants to sell? 

[dylanisabaddog 4,931]

7 hours ago, TeemuVanBasten said:

Issuing new shares for the Americans to purchase is one way to get money into the club, but it means you all own less of the club in the process.

Does this bother any of you?

Alternative of course would be for Attanasio to acquire his shares from existing shareholders and then provide a capital injection through a loan.

Feels to me like existing shareholders should at least have the option to increase their shareholding to consolidate or increase their share of the club.

Many/most won't take that option of course, and all of those people would still then be diluted, but if there is a new share issue then all shareholders should be given the opportunity to participate?

How do you know that Anastasio is going to buy the shares?  It seems probable but there are other possibilities. 

In general though, your views on the fairness or otherwise are sadly irrelevant. As long as the Board is acting within the law there is nothing that anyone can do to change what's happening. 

 

[A Load of Squit 5,170]

I didn't buy my shares as an investment, if I wanted a return on the money I wouldn't have bought shares in a football club.

If it turns out that I can buy new shares as part of my existing holding then I probably will.

In my case it was an emotional decision to buy shares.

[Naturalcynic 631]

I could imagine that the Canaries Trust might be a bit peeved but personally as a holder of only a few shares it seems a sensible way for the Americans to be able to put in a significant amount of money with it going to the Club rather than buying out existing shareholders and the money going to them instead (if that’s what’s actually going to happen).

[dylanisabaddog 4,931]

17 minutes ago, Naturalcynic said:

I could imagine that the Canaries Trust might be a bit peeved but personally as a holder of only a few shares it seems a sensible way for the Americans to be able to put in a significant amount of money with it going to the Club rather than buying out existing shareholders and the money going to them instead (if that’s what’s actually going to happen).

No one can know for sure but it is possible that the shares are being issued to Smith at par. The benefit of that would be that it would reduce the value of all the issued shares and make it cheaper for Anastasio if/when he has to buy minority shareholdings. 

That may seem unfair but it could be justified by saying that the club won't benefit in any way from the transfer of minority shares. It would be dead money for the club and Anastasio although I'm one of those who would lose out financially. Never mind...... 

[TeemuVanBasten 3,327]

2 hours ago, dylanisabaddog said:

How do you know that Anastasio is going to buy the shares?  It seems probable but there are other possibilities. 

In general though, your views on the fairness or otherwise are sadly irrelevant. As long as the Board is acting within the law there is nothing that anyone can do to change what's happening. 

I didn't say it was illegal, just that it would be nice if some thought was given to other shareholders.

Its not impossible that there are other possibilities, one is that its another American and actually we'll end up being owned by a group or consortium of Americans who each own a stake, which we've seen elsewhere, rather than by this particular American.

But based on previous noise I'd consider Mark Annatosio increasing his stake to be more likely.

[TeemuVanBasten 3,327]

9 hours ago, littleyellowbirdie said:

I must say, I'd quite like a shareholding if I could get one, just for the fun of it. Been toying with the idea of joining the Canaries trust as a half-way house.

 

2 hours ago, dylanisabaddog said:

Post on here to see if anyone wants to sell? 

 

https://www.canariestrust.org/ncfc-shares

Keep an eye out on this

[It's Character Forming 1,161]

10 hours ago, TeemuVanBasten said:

Issuing new shares for the Americans to purchase is one way to get money into the club, but it means you all own less of the club in the process.

Does this bother any of you?

Alternative of course would be for Attanasio to acquire his shares from existing shareholders and then provide a capital injection through a loan.

Feels to me like existing shareholders should at least have the option to increase their shareholding to consolidate or increase their share of the club.

Many/most won't take that option of course, and all of those people would still then be diluted, but if there is a new share issue then all shareholders should be given the opportunity to participate?

I have a very small shareholding which is 100% for sentimental reasons.  I have no problem with a takeover providing I think it's in the club's best interests and on what I know so far, this one is.  So I've no problem at all.

Ultimately if MA decides on a complete takeover he may decide to buy up all minority shareholdings which is also his call if he wants to.

[SwindonCanary 455]

3 hours ago, dylanisabaddog said:

Post on here to see if anyone wants to sell? 

I have TEN shares given to me by Mr Doncaster and that's enough for me. I'm a share holder. 

Edited January 30, 2023 by SwindonCanary

[Mello Yello 2,296]

I feel sorry for Neppers Tom in all of this....Truly, madly deeply.....

[Yellow Fever 3,792]

I have my (physically large) dividend cheque in front of me - have to go to the bank. It might buy a pint.

No problem with share dilution - the large shareholders will have the right to maintain their percentage holding anyway but they have to match the investment. 

It's usually a way to refinance a company (or to dilute a particular awkward shareholder holding) but only if the companies finances can justify it.  

[GMF 747]

4 hours ago, Naturalcynic said:

I could imagine that the Canaries Trust might be a bit peeved but personally as a holder of only a few shares it seems a sensible way for the Americans to be able to put in a significant amount of money with it going to the Club rather than buying out existing shareholders and the money going to them instead (if that’s what’s actually going to happen).

You’d imagine wrong, given that the Trust has regularly asked over the years about the possibility of outside investment, only to repeatedly be told that there was little interest from investors, something that was always taken with a pinch of salt!

Of course, one of the consequences of new equity being injected by investors is a dilution of existing shareholdings - it goes with the territory!

The other aspect is that the Club has in excess of 6,800 small shareholders, which, from an administrative perspective, is a bit of a nightmare. I suspect they would quite like the idea of fewer, rather than more shareholders, which seems to be the current direction of travel.

[TeemuVanBasten 3,327]

2 hours ago, Mello Yello said:

I feel sorry for Neppers Tom in all of this....Truly, madly deeply.....

I'm sure he'll still get well looked after and deep down knows he'd be out of his depth.

[TeemuVanBasten 3,327]

2 hours ago, GMF said:

The other aspect is that the Club has in excess of 6,800 small shareholders, which, from an administrative perspective, is a bit of a nightmare. 

I own shares in a few other non-listed businesses with 1000 to 5000 shareholders and all three in recent years and reduced paper communications (changed to email or via a dedicated comms page) and now just send the annual report each year as the printing and postage costs were getting out of control.

All three have sporadic (quarterly or six monthly) share trading and in two of the businesses the directors frequently buy out multiple smaller shareholders (say £500 worth and under), and I presume this is to reduce that administrative burden. Due to the cost levied on transferring ownership it would be cheaper per share for them to buy one larger shareholding, so I assume that is the motive.

Edited January 30, 2023 by TeemuVanBasten