Last week Mr Green announced triumphantly that £17 million had been “pledged” so far in terms of the Rangers share issue.
As the official Rangers website stated:-
The response from supporters has been huge.
Charles Green told RangersTV: “It has been very encouraging and I’m now seeing the passion and commitment of Rangers fans financially. We see it on the terraces, of course, but in these difficult financial times the response has been amazing. In the last figures I saw a couple of days ago over 8000 fans had registered – with some 20000 fans on the website – and we have pledges of around £17million. And by the time we get to the cut-off date that figure will have risen.
“I would like to stress that any fan who backs up his or her pledge with a cheque will get their shares. I have had some calls from people concerned about that because we said the IPO would be up to £20million but fans will get their shares.
“It’s much better than I expected. I don’t think anyone could have predicted the response and it’s testimony to what Rangers fans are about. They can see that the club is going in the right direction and this really is the icing on the cake.
“I don’t think there is any doubt that we will know exceed our expectations.
“Ally McCoist and I were at the AIM dinner last week following the announcements and we got a fantastic ovation and following the formalities we were chatted up by fund managers who are interested in meeting us when we do the formal roadshow which will be in about two weeks’ time.
“I said back in May that we would IPO and that we would have a very diverse share base where there wouldn’t be control for one person. To my mind this is the most important and last step of promises we made in May.”
I may be accused of nit-picking, but I have a couple of points to make about what Mr Green was saying.
First, I looked up the dictionary definition of a “pledge”.
Cambridge Dictionaries Online offers the following:-
“A serious or formal promise, especially one to give money or to be a friend, or something that you give as a sign that you will keep a promise”.
That suggests that there is something binding, or intended to be binding, about what is pledged. Truly therefore it is a matter of great satisfaction for Mr Green if he has been able to secure, even in advance of the Prospectus, commitments for over £17 million of the £20 million worth of shares to be issued. Well done Mr Green!
I had a look at the information on Rangersshareoffer.com, the portal for registering interest and making one’s “pledge”.
The conditions are very clear. On the first page it states:-
“The information on the Site does not take into account your particular needs or circumstances and does not constitute a personal investment recommendation. Nothing on the Site should be regarded as an offer to buy, sell or trade in shares. The value of shares or income from them may go down as well as up. If you make an investment you may not get back the amount you invested. If you are in doubt about the merits or risks involved in a potential investment, you should consult a suitably qualified professional adviser.” (Emphasis added).
Then on the next page we see the following:-
“Rangers Football Club is now accepting registrations of interest in applying for shares. This registration process will allow you to provide an indication of the value of shares you may wish to purchase.
Please note that an investment in shares can only be made following publication of the prospectus relating to the offer. (Emphasis NOT added.)
The Prospectus is being prepared and is subject to approval by the Financial Services Authority. The Prospectus will be made publicly available, including on this website, in due course. Following the publication of the Prospectus those persons who have registered an interest in applying for shares and who qualify to participate will be contacted by Capita to complete any Application Form for the investment.”
After providing one’s details the following appears:-
“An email will be sent to you to acknowledge receipt of your registration details. This email does not constitute acknowledgement or confirmation by Rangers Football Club or Capita that an application will be processed and does not constitute acceptance by Rangers Football Club of an offer by you to subscribe for shares.”
Finally there is a page for indicating one’s level of interest:-
“You are being asked to select an amount as an expression of interest only. By selecting an amount you are not obliged to make any payment, either now or in the future. On publication of the Prospectus and Application Form you will be entitled to adjust the level of your investment (subject to the terms and conditions of the offer as set out in the Prospectus) or withdraw entirely from the process.
If you would like to invest more than £10,000 or you are investing on behalf of a corporate entity please contact Capita on 0871 664 9271 for more information (lines are open Monday to Friday, 9am to 5.30pm). “
According to Mr Green over 8,000 fans had registered. Unless I missed it, which as the share offer site is straightforward is unlikely, there is no question asking if one is a Rangers fan or season ticket holder. The site is open for anyone, whether a loyal fan, an astute investor, or a puckish spirit, to register an “interest”.
According to Mr Green, over £17 million has been “pledged”. That works out at just over £2,000 per “pledge”. As the online form allowed “pledges” of up to £10,000, it is actually surprising that the average is as low!
Remember the Rangers Fans Fighting Fund? When it looked as if the team might not make it to the end of the season, Rangers fans rushed to “pledge” huge sums to save their club. By the time donations stopped, I understand a grand total of just under £700,000 had been handed over by the fans. That was a fine achievement by them, but a droop in the ocean of what might have been needed to kept he team afloat.
Now this of course was by way of charitable donation, or purchase of scarves, but was at dark days when it seemed that Rangers might be a game or two from extinction.
One might therefore take with a pinch of salt the “commitments” totalling in excess of £17 million. That is especially so when one reads that the registration of interest is not in any way binding on either party. A person registering is not entitled by doing so to any amount of shares. Equally, they are not obliged to pay a penny.
I know a number of people who have registered but who are probably unlikely, because of the economic climate perhaps, to take up the £10,000 they “pledged”. There is no comeback against them for doing so.
I also wondered how Mr Green could guarantee that any fan who backed their “pledge” up with a cheque was guaranteed to get their shares. However, as the website asks for prospective investment, rather than for number of shares, this means that the IPO price will be adjusted to reflect the interest. Therefore, if there were a firm commitment by enough fans to buy £100 million of shares, then the shares, with a face value of £1, would go on sale for £5 each.
So Mr Green is quire right to say that everyone who wants shares will get them.
And who can blame him for talking up his share issue. I especially like his comment about looking “a couple of days ago” at the figures. If the figures have any meaning, one would expect him to be speaking to Capita Registrars on a minute by minute basis to monitor “pledges”. Or maybe this is an acknowledgement that these figures are of some academic value, but are only a very broad brush?
I wonder if he would be good enough to tell us who the fund managers were who were “chatting him up”. Bearing in mind the opinions voiced by various pundits and analysts, if I became aware that my fund manager was considering investing in Rangers shares at this stage, I would want to move my money to another fund, unless of course I had signed up for the “very risky” option!
The most positive newspaper report was in the Independent, where it was described as being a speculative purchase, but one worth considering, although “not one for widows or orphans”!
Other opinions were less positive, one describing the issue as “prune juice”. Somehow that does not strike me as a favourable opinion!
On the other hand, Mr Green is confident that investors will grow their investment by four times over the next few years, so as a prudent man I registered for the full £10,000 myself. I suspect that I would be able to persuade a bank to lend me that sum – after all, where else can one expect a 400% return over a couple of years!
I am sure that the statement on the website which reads, “The value of shares or income from them may go down as well as up. If you make an investment you may not get back the amount you invested” is only there to comply with some pedantic legal requirement, as these shares are going to rocket. After all, that is what Mr Green has told us, and when has he ever given his team’s fans anything to doubt in what he has had to say?
Posted by Paul Nostradamus McConville
NB Nothing stated above should be taken as a share recommendation or a recommendation not to buy shares. Shares can go up or down in value. If deciding on buying shares, ensure you listen to a reliable Yorkshireman. You know it makes sense.