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canary cherub

Making a killing from Norwich City shares?

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The current value of shares held by Smith and Jones is just under £9.75 million* with ordinary shares valued at £25 each.  They hoovered up all the remaining shares last season, which cancelled out their loans to the club and cost them another £270,000 or so (Annual Report p.41).

At the AGM on 18th October there''s a proposal to issue about £1m more ordinary shares and increase the share price from £25 to £30 each. 

That means that overnight, Smith and Jones'' shareholding will increase in value by nearly £2m to just under £11.7m. 

Given our lack of success on the field of play, you may well ask how the share value can increase by 20% just like that?  The reason, as I understand it, is that the asset value of the club has increased significantly.  It has increased because of the spending on infrastructure.

There''s nothing illegal about this I hasten to add, in fact it''s normal business practice.  But the fact is that they stand to make money from the club''s spending on infrastructure.  No doubt they would argue that this compensates them for waiving interest payments on their loans.  But it makes it much more expensive for someone to buy them out.

One thing is clear:  the myth of Smith and Jones as selfless benefactors has been well and truly exposed. 

* 61.2% of total share value of approximately £15.9m

 

 

 

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[quote user="mystic megson"]

There''s nothing illegal about this I hasten to add, in fact it''s normal business practice. 

[/quote]

On reflection I''m not 100% sure about that.

Purchasing over £1m of shares then whacking the price up by 20% would probably be classed as insider trading if the club was quoted on the stock market.  Insider trading IS illegal. 

 

 

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Oh dear. I''m afraid the comments are completely unwarranted. All NCFC have done based on what you have said is increase the NOMINAL share price which is a fairly meaningless legal matter that no one in business pays much attention to. The share are worth what some are willing to pay for them and giving that the club is not making a profit the market value of the shares is likely to have gone down recently rather than up. You are right in saying what they have done is normal business practice but it has absolutely nothing to do with Insider Trading which you are quite right is illegal but applies to publicly traded shares and has absolutely nothing to do you with that you say NCFC has done in any sense.

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Mystic, just to clarify further, ultimately the shares are only worth what someone will pay for them not the number printed on the share certificates. A rational investor would pay the discounted net present value of the future csah flows of the business. Giving the club is lost making excluding the parachute payments this suggests that a buyer would actually want to be paid to buy the business. If the business was shut down assuming the balance sheet represents market values it would be worth the 16 milllion market shareholder funds less the cost of paying out the staff contracts which I guess would be about 8million based on a years playing wages so 8 million. Ignoring the player contracts at best their shares are worth the shareholder funds of 16m times their 61.2pc shareholding which is 9.8million. Overall, I suspect they would be very happy to get back what ever money they have put it. The only way to increase their share value is to improve the profitability and the only way to do this in the long term is to be promoted and stay there which is easier said than done. So has any one here got 10m to spare plus the money to invest say 7m a year so we can compete with the top clubs in the division on the off chance that we may get promoted and some how manage to stay there?

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[quote user="mystic megson"]

The current value of shares held by Smith and Jones is just under £9.75 million* with ordinary shares valued at £25 each.  They hoovered up all the remaining shares last season, which cancelled out their loans to the club and cost them another £270,000 or so (Annual Report p.41).

At the AGM on 18th October there''s a proposal to issue about £1m more ordinary shares and increase the share price from £25 to £30 each. 

That means that overnight, Smith and Jones'' shareholding will increase in value by nearly £2m to just under £11.7m. 

Given our lack of success on the field of play, you may well ask how the share value can increase by 20% just like that?  The reason, as I understand it, is that the asset value of the club has increased significantly.  It has increased because of the spending on infrastructure.

There''s nothing illegal about this I hasten to add, in fact it''s normal business practice.  But the fact is that they stand to make money from the club''s spending on infrastructure.  No doubt they would argue that this compensates them for waiving interest payments on their loans.  But it makes it much more expensive for someone to buy them out.

One thing is clear:  the myth of Smith and Jones as selfless benefactors has been well and truly exposed. 

* 61.2% of total share value of approximately £15.9m

 

 

 

[/quote]Not quite the philanthropic souls we are led to beleive are they? Building the capital value of the company, whilst allowing the football team to stagnate wither and die. every season turning a profit in the transfer market to boot. End result, yesterday evening for all to see. Thanks Smith.

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[quote user="T"]Oh dear. I''m afraid the comments are completely unwarranted. All NCFC have done based on what you have said is increase the NOMINAL share price which is a fairly meaningless legal matter that no one in business pays much attention to. The share are worth what some are willing to pay for them and giving that the club is not making a profit the market value of the shares is likely to have gone down recently rather than up. You are right in saying what they have done is normal business practice but it has absolutely nothing to do with Insider Trading which you are quite right is legal but applies to publicly traded shares and has absolutely nothing to do you with that you say NCFC has done in any sense.[/quote]

I bow to your legal and/or financial expertise T, but on this occasion you''re wide of the mark.  Have you read the Annual Report?

Firstly, get your facts right.  Unlikely as it may sound, in each of the past three seasons the club has made a pre-tax profit.  £9,118.979 (2005), £3,064,814 (2006), £627,125 (2007). 

Secondly, your argument seems to be based on the supposition that the club is floated on the open market.  It isn''t.  The nominal value of Ordinary shares is £1 and is, as you say, fairly meaningless.  If you want to purchase shares from the club they cost £25 each.  The purchase price is agreed at the AGM and does not change unless and until another resolution is passed.  The price, as I understand it, is based on a proportion of the asset value of the club, which has increased markedly in recent years due to development of infrastructure.  Clearly a shareholder is free to sell their shares to someone else at whatever price they choose, but there is no open market value as such. 

Your underlying attitude towards the directors of our club seems to be that "They tell us they''re prudent so it must be true".  Oh dear. 

 

 

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That is the most absolute rubbish. The shares are worth what someone is prepared to pay for them. How much would you pay for a share in a Championship Club that is fourth from the bottom of the table and has lost the last five games........ I would venture to say "Not a lot !"

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Still not there. The only thing that has been exposed here so far is a misunderstanding of financial and commercial matters. In simple cash terms they have given millions of pounds of loans for free and taken no money out of the club with no obvious sign of someone willing to give them some money in return which is philanthropic. Take a look at the accounts - the club is loss making not building capital value.

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Thanks Bobert, I was trying to explain it technically but the bottom line is as simple as you say.

Mystic, I don''t have the accounts but I have read the post from VOS on the accounts which is I found very informative. I understand that the club has made a profit in earlier years but was break even last year with the benefit of  7million TV money. However, I understand that you were talking about the shareholders making a profit simply by increasing the nominal value of shares. I was merely saying that the shareholder value relates to the future profits which do not look good. If I took a pen and write 20 pounds on a 10 pound note or advertised my house for twice the market value would you give me twice the money? The nominal value only relates to the subscription for new shares and has nothing to do with the value of Delia/MWJ shares. Do I think they have made mistakes - yes, that is the nature of business. I also think the past profits mean they could have invested more in players when we got promoted. The problem is to attract the best players you run the risk of having long term contracts which you can not afford to meet if you do not stay up. The only way they can make money is to get promoted and stay up - being fouth from bottom in the championship is not in their financial interest as I''m sure they know. So yes they have made mistakes as we all do. The fact is that they have put a lot of cash into NCFC without taking any cash out. The only way they will get there money back is to get promoted and stay in the premiership or find an investor willing to pay more than the economic value of their shares. I am not happy that we are 20th and if I had put 8million into the club without any sign of a return I would be even less happy. 

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So we didn''t "really" make a profit.  Have a word with Shaun O''Hara (Director of Finance) will you, because he thinks we did: "Group profit before tax of £0.6m compared to £3.1m in 2006" (AR 2007 p.6).

I don''t know what your motive is for posting this garbage. 

 

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If supporters groups of norwich city could raise enough money i mean loads of money then they could buy a share in the club thereselves.atleast then norwich city might gt things done what the fans want to get done.....is there any super rich fans???????????? like celtic have rod stewart lol

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Mystic, just to clarify I meant we did not make a profit allowing for the 7m pounds TV money. Furthermore the figure you quote is before tax. A standard way to value a business is to look at the underlying future profits, otherwise known as quality of earnings or normalised earnings which for my sins is something I do for a living. Taking your figures, the underlying future profit of the business going foward is negative 6.4m. The 0.6m profit that you mention less the 7m parachute payments which we will no longer get. My motivation is merely to correct a falsehood and a worry that if Delia/WMJ get fed up with the club and the unwarranted abuse then they take the money they have invested and then we really are in very big trouble. I wish what I said was not garbage but the accounts and the Deloitte report do suggest that championship clubs are typically loss making on average and a very unattractive investment option.   I understand the accounts says that Delia/WMJ have not taking out any money of the club and as Bobert points out buying shares in a club fourth from bottom is not atractive. Therefore any suggestion that our problems are because the shareholders are looking to make money out of the club or doing anyting dodgy just does not stack up. That does not mean that they have not made mistakes or that I''m happy with the current situation just that I understand how difficult it is.

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[quote user="mystic megson"]

So we didn''t "really" make a profit.  Have a word with Shaun O''Hara (Director of Finance) will you, because he thinks we did: "Group profit before tax of £0.6m compared to £3.1m in 2006" (AR 2007 p.6).

I don''t know what your motive is for posting this garbage. 

 

[/quote]

Mystic - what is your motive for banging about a meaningless ''Group profit before tax of £0.6m''?

The actual profit, as you must well know, was £90,529, which on a turnover of almost £24m is very shakey indeed.

When you add in a £17.5m debt and the fact that our revenue this year will be down £7m with only a relatively small drop in costs then shares in the club are practically worthless - at this moment in time.

As others have pointed out the only way they will ever be worth anything is for us get promoted and stay up, so frankly this idea that the board are happy for us to sit in Championship while they fill their boots from off field activities is absolutely laughable.

 

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[quote user="mystic megson"]

The current value of shares held by Smith and Jones is just under £9.75 million* with ordinary shares valued at £25 each.  They hoovered up all the remaining shares last season, which cancelled out their loans to the club and cost them another £270,000 or so (Annual Report p.41).

At the AGM on 18th October there''s a proposal to issue about £1m more ordinary shares and increase the share price from £25 to £30 each. 

That means that overnight, Smith and Jones'' shareholding will increase in value by nearly £2m to just under £11.7m. 

Given our lack of success on the field of play, you may well ask how the share value can increase by 20% just like that?  The reason, as I understand it, is that the asset value of the club has increased significantly.  It has increased because of the spending on infrastructure.

There''s nothing illegal about this I hasten to add, in fact it''s normal business practice.  But the fact is that they stand to make money from the club''s spending on infrastructure.  No doubt they would argue that this compensates them for waiving interest payments on their loans.  But it makes it much more expensive for someone to buy them out.

One thing is clear:  the myth of Smith and Jones as selfless benefactors has been well and truly exposed. 

* 61.2% of total share value of approximately £15.9m

[/quote]

What I find interesting MM is that you appear to have the ability to articulate very well while, at the same time, reason so very poorly.

The history of bankrupt organisations is filled with those that were rich with non-current ( or particularly liquid ) assets. If NCFC is such a lucrative money making club, as you continuously strive to point out, the flock of investors would literally be lined up to make an offer that could hardly be refused. That does not appear to be the case, does it? Even the Turners, having put their toes in the water, presumably want some time to determine whether they want to go in for a swim. Even if your wrong headed thinking was correct with respect to how a non-public company is valued, then the supposed 11.7 million pounds divided by the number of fans currently attending matches equates to less than 500 pounds per supporter. Not a vast amount to be raised in an attempt to oust the "horrible" Smith & Jones twosome is it?

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This board have made some dubious decisions over their tenure mostly being not being positive enough when we reach the Premiership and not being harsh enough with the manager when we got relegated and striving for a quick return that year.

However I do not believe that the majority shareholders are using the club to further their own bank balances. We are all obviously upset about the current position and standard of football on offer right now. Things obviously have to change soon in some form and maybe the ‘Turners’ will bring their money and business acumen to bare in the coming months.

 However I do not see Smith and co as money grabbers trying to make a quick profit. There are far more lucrative ways to make easy profit then running a football team IMHO for people with large bank balances.

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[quote user="T"]Mystic, just to clarify I meant we did not make a profit allowing for the 7m pounds TV money. Furthermore the figure you quote is before tax. A standard way to value a business is to look at the underlying future profits, otherwise known as quality of earnings or normalised earnings which for my sins is something I do for a living. Taking your figures, the underlying future profit of the business going foward is negative 6.4m. The 0.6m profit that you mention less the 7m parachute payments which we will no longer get. My motivation is merely to correct a falsehood and a worry that if Delia/WMJ get fed up with the club and the unwarranted abuse then they take the money they have invested and then we really are in very big trouble. I wish what I said was not garbage but the accounts and the Deloitte report do suggest that championship clubs are typically loss making on average and a very unattractive investment option.   I understand the accounts says that Delia/WMJ have not taking out any money of the club and as Bobert points out buying shares in a club fourth from bottom is not atractive. Therefore any suggestion that our problems are because the shareholders are looking to make money out of the club or doing anyting dodgy just does not stack up. That does not mean that they have not made mistakes or that I''m happy with the current situation just that I understand how difficult it is.[/quote]

Oooops...that bogey man in the cupboard is coming out again!  Same old tripe from the apologists intent on pro-Board scaremongering. It worked last time....so surely it must work again eh?

Shocking as it may seem to you....there are many of us who would be only too pleased to see the back of Smith and Co....and the only folk who would lose should they decide to take their money and run would be Smith and Co. The club would remain the club just as it was before they arrived....and would survive and prosper with it''s new owner. As NCFC diminishes as a viable set-up....so will Smith and Cos. investment...the only thing they are worried about at this time. If NCFC get relegated....then so does their pay-off.

I''m with Mystic Megson here as I read things in a very similar way...making my earlier point that accounts can be read in a number of ways. "Positive" if you want to assure your holding and convince your investors that you are doing a splendid job...or "negative" if you can cut through the spin and see things as they really are.

Either way...I''d sooner get back to a simple grass roots club on the rise without Smith...than the celebrity catering empire we have at present. Throwing figures around to justify the rubbish currently being dished up at Carrow Road is where we are with NCFC today...whereas such matters should not be an issue. Smith and Co.took on the job and have failed the paying public big-time....so no-one is to blame except them. 

You bandy about numbers in the accounts if you want...but I''ll stick to counting the numbers in our points for column....which personally is how I judge the success or failure of the club.

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Cluck, I totally agree with you in terms of the bottom line being our league position. The reality is that the financial position and the level of invetsment affects our leaugue position. To suggest that there is some kind of dodgy activity going on without any evidence is going too far is all I''m saying. My position is very similar to GJD. I agree numbers can be interpreted in a number of ways but then my job is to interpret numbers. Profits were made with the premiership payments but I''m afraid the last time we looked we are no longer in the premier league. I have no problem with new investors but given the underlying losses of a championship club and the debt and trying to compete with clubs with parachute payments and wealthier investors NCFC is not a vey attractive financial investment to say the least. So it is not surprising that we have not seen a queue of new investors which your thinking assumes.

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[quote user="T"]

Cluck, I totally agree with you in terms of the bottom line being our league position. The reality is that the financial position and the level of invetsment affects our leaugue position. To suggest that there is some kind of dodgy activity going on without any evidence is going too far is all I''m saying. My position is very similar to GJD. I agree numbers can be interpreted in a number of ways but then my job is to interpret numbers. Profits were made with the premiership payments but I''m afraid the last time we looked we are no longer in the premier league. I have no problem with new investors but given the underlying losses of a championship club and the debt and trying to compete with clubs with parachute payments and wealthier investors NCFC is not a vey attractive financial investment to say the least. So it is not surprising that we have not seen a queue of new investors which your thinking assumes.

[/quote]

There seems to be a slight contradiction here T in that you seem to believe that the massive investment in infrastructure (£28.5million over five years) is worthwhile and will generate profits for the club and yet you don`t think any serious investor would touch us with a bargepole? Surely if all these non-football investments were so wise and certain to generate big profits, there would be a queue to take over such a model club?

The main thing that would put a serious investor off is that the club are a million miles away from the holy grail of promotion, because the team has been treated as a cash-cow to pay for all that "sensible" off-pitch spending. Which is precisely why the supporters are in revolt.

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[quote user="Mr.Carrow"][quote user="T"]

Cluck, I totally agree with you in terms of the bottom line being our league position. The reality is that the financial position and the level of invetsment affects our leaugue position. To suggest that there is some kind of dodgy activity going on without any evidence is going too far is all I''m saying. My position is very similar to GJD. I agree numbers can be interpreted in a number of ways but then my job is to interpret numbers. Profits were made with the premiership payments but I''m afraid the last time we looked we are no longer in the premier league. I have no problem with new investors but given the underlying losses of a championship club and the debt and trying to compete with clubs with parachute payments and wealthier investors NCFC is not a vey attractive financial investment to say the least. So it is not surprising that we have not seen a queue of new investors which your thinking assumes.

[/quote]

There seems to be a slight contradiction here T in that you seem to believe that the massive investment in infrastructure (£28.5million over five years) is worthwhile and will generate profits for the club and yet you don`t think any serious investor would touch us with a bargepole? Surely if all these non-football investments were so wise and certain to generate big profits, there would be a queue to take over such a model club?

The main thing that would put a serious investor off is that the club are a million miles away from the holy grail of promotion, because the team has been treated as a cash-cow to pay for all that "sensible" off-pitch spending. Which is precisely why the supporters are in revolt.

[/quote]

I would go a stage further...again as I''ve said before.

Smith and Co. have clearly invested in infrastructure deliberately as this increases the value of their holding. Spending on moderate players who could very quickly lose their value is for them poor business practice....whereas spending on recognised prospects such as the likes of Ashton to sell on later is a far better risk. The returns from such sales are again invested in infrastructure thus making it a merry-go-round which only benefits the business...not the team. 

I''m sorry...but the whole things stinks of empire building rather than developing a viable football club. The latter is what the tens of thousands of City fans have a right to expect....and they have been shafted big time. We have always been a "selling" club...but this takes that tag much further down the road likening it to fattening up a pig and taking it to market.

It''s all just a scam to ensure that Delia makes a wad. In any other business I would applaud her motives....but by cynically using a football club adored by many thousands of supporters (who have bankrolled her project) I think she and MWJ are a disgrace.

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IF Norwich City supporters raise enough money and then buy shares in the club. Then the fans point of view can actually get across and i would happily represent the supporters views and opo9ninions    what do you all think?????

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[quote]Smith and Co. have clearly invested in infrastructure deliberately as this increases the value of their holding[/quote]Possibly.  Or possibly they are investing in business projects in an attempt to create a large enough cash-flow to give us one of the largest wage-bills in the Championship.  The only problem with this is that creating businesses to make money takes time.  So we''ll probably be a low-mid table championship club for at least the next 5 seasons.  If we ever get to the point where our turnover is 3 times that of an average championship club though, there''s a good chance that we''ll have a decent enough wage-bill for a crack at Promotion.What they should be doing at the moment is employing a manager who can get the best out of a small resource.  If Grant isn''t it, maybe they need to look elsewhere.  It''s a damn shame Harry Redknapp''s doing so well at the moment, he''s the kind of wheeler-dealer we need.  If we''d have caught him in his championship days, he could have done a lot for us in our position.

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Cluck

What you say is sadly true, they have continued to invest in the infrastructure at the expense of the team, seems they didn''t learn from the past in that. What is puzzling though is who they hope to sell their shares to eventually. It can''t be for football reasons can it. As T says, what football minded person would want to take over? Only someone who was City through and through and had money to burn.

What concerns me is who they might sell to and for what? Could Carrow Road end up being a giant B&Q outlet or similar -the land value there would be high. I wonder if the board have plans to build a new stadium up at Colney? They own enough land up there to build one....

I am not saying I want them to stay, I don''t - they have no idea how to run the football club (which last time I checked) it clearly states this "business" is on the front of the South Stand.....I just wonder if the Holiday Inn might be extended into a few stands soon...taking over the Barclay.....

However who do we replace them with? At the moment there is no one rich or generous enough to buy them out, and don''t they just know it.

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Cluck, you are good with words. However, although it is a common fallacy investing in infrasture or increasing the price written on the shares does not increase the value of their holding per se. Only increasing the future sustainable profit and resulting cash flows does that as in any business. They are only going to make a wad is if we get promoted and stay there or if someone is willing to pay above the economic value of the shares which for a business with profits going down is not a lot.

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[quote user="T"]Cluck, you are good with words. However, although it is a common fallacy investing in infrasture or increasing the price written on the shares does not increase the value of their holding per se. Only increasing the future sustainable profit and resulting cash flows does that as in any business. They are only going to make a wad is if we get promoted and stay there or if someone is willing to pay above the economic value of the shares which for a business with profits going down is not a lot.[/quote]

T, i have done a bit of investing in the stock market and i think you know well enough that Net Asset Value underpins the share price of many a loss-making company. Ours has gone up whilst the performance of our core business has declined dramatically, although the financial impact of this hasn`t really been felt yet. You`re right of course that the Premiership is where the real money is, which makes it all the more disgraceful that the club have basically given up on that ambition to focus on frittering money on expensive trivialities off the pitch.

I respect your opinion, but i would suggest that you look through the last few annual reports as i think you might change it.

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For my sins I work with private equity houses and large corporates buying and selling buinesses. A basic tenet of economic theory and business valuation is you look at the present value of the discounted future cash flows of the business not the historical sunk costs repesented by the net asset value. i.e. what you should pay for a business depends on what cash you will get in return in the future after allowing for the interest cost of money not what was spent in the past. Therefore increasing the assets of the business is only any good if it increases the future cash flows of the business. So you can have all the assets you like but if you can not generate any cash out of them it does not help. I would be interested to see the accounts but to be honest a valuer looks at the future business plans and the evidence to support them and spends very little time looking at the accounts as the accounts relate to the past and a purchaser is buying the future.  Quite simply as someone said earlier the profits are now minimal (including the 7m ) and therefore the shares are not worth much.

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[quote user="pickle"]IF Norwich City supporters raise enough money and then buy shares in the club. Then the fans point of view can actually get across and i would happily represent the supporters views and opo9ninions    what do you all think?????[/quote]

hilarious...

Somebody who is so far wide of the mark represnting the fans views and opinions???

Clearly there would be no change there then would there???  [:D]

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[quote user="Smudger"]

[quote user="pickle"]IF Norwich City supporters raise enough money and then buy shares in the club. Then the fans point of view can actually get across and i would happily represent the supporters views and opo9ninions    what do you all think?????[/quote]

hilarious...

Somebody who is so far wide of the mark represnting the fans views and opinions???

Clearly there would be no change there then would there???  [:D]

[/quote]Pickle is 14 years old ffs smudger. But then again his views are light hearted which is more than can be said for your childish ramblings.

And as for representing the views and opinions of fans I really don''t think you are qualified either.

I''m looking forward to your reply smudger. What will I be this time, sheep, moron, idiot ?.

I rather think that you are more suited to the school playground than pickle !!

 

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[quote user="T"]

For my sins I work with private equity houses and large corporates buying and selling buinesses. A basic tenet of economic theory and business valuation is you look at the present value of the discounted future cash flows of the business not the historical sunk costs repesented by the net asset value. i.e. what you should pay for a business depends on what cash you will get in return in the future after allowing for the interest cost of money not what was spent in the past. Therefore increasing the assets of the business is only any good if it increases the future cash flows of the business. So you can have all the assets you like but if you can not generate any cash out of them it does not help. I would be interested to see the accounts but to be honest a valuer looks at the future business plans and the evidence to support them and spends very little time looking at the accounts as the accounts relate to the past and a purchaser is buying the future.  Quite simply as someone said earlier the profits are now minimal (including the 7m ) and therefore the shares are not worth much.

[/quote]

Yes T, but i think you have said yourself that the huge amounts the club have invested in off-pitch stuff is designed to produce growing income streams in future years therefore, according to your description of valuation,  if all goes to plan these ventures WILL boost the value of the shares. Theoretically, the investor will be buying into various growing income streams with the potential of a massive "promotion windfall", all underpinned by a valuable land-bank. Even with the debt i think the main holders will make a good profit on their shares.

By the way, don`t be suprised to see costs fall this year as dramatically as they rose on promotion. Losing the parachute payments will have been factored in and if they yet again make a decent profit in the transfer market, they will make an overall profit.

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[quote user="T"]Cluck, you are good with words. However, although it is a common fallacy investing in infrasture or increasing the price written on the shares does not increase the value of their holding per se. Only increasing the future sustainable profit and resulting cash flows does that as in any business. They are only going to make a wad is if we get promoted and stay there or if someone is willing to pay above the economic value of the shares which for a business with profits going down is not a lot.[/quote]

May i suggest you consider the following......

There are two shops....one needing a full structural re-build...but with acceptable stock on the shelves. The second shop is pristine and structurally in place....yet it''s stock is of an unacceptable standard. Which would you buy?

I suggest the former would be a poor investment as much of future profit would be needed to refurbish the structure. The latter is up and running....and your own business nous would be free to stock the shelves with your own merchandise...thus making immediate profit.

My point is...you would pay rather more for the latter than the former......so Smith is increasing her personal value by raiding transfer funds. Investment in infrastructure increases the value of the business...not the stock.

Been there...done it.

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