Ecojon’s Rangers Share Update

Ecojon posted this as a comment earlier this week. Somehow it fell into moderation. Real life (including research into the difference between dwangs and noggings) meant that catching up fell behind.

Having just read thru all the comments from the last few days (phew) I’m getting back to cruising speed.

So, some thoughts on Mr Di Stefano to come plus a post, which links with the Maguire/INLA one about “offence”.

But, on this bright Good Friday morning I will pass you on to ecojon.

Since his post was written I understand the share price has further declined. I am sure readers can chip in with market updates!

Fortunately Mr Green’s avoidance of “external debt” means the company will not be directly affected immediately as it would be if shares had been pledged as security with a lending institution.

And so (without further ado) I pass you to ecojon’s tender care.

Paul
—–

I was just thinking back to the beginning of the year when the Rangers shares hit their highspot of what was it 94p after an IPO launch price of 76p in December. And the soaring market cap figure which had far outstripped the Celtic one was universally praised by the blue camp. My explanation of what market cap actually meant was brushed aside as a feeble excuse in the general hysteria.

Those were heady days and clarkeng had started posting daily share prices for Rangers and Celtic and confidently predicting a collapse in the Celtic share price by March.

Still we all make mistakes and as the Rangers share price started to dip the daily posting of the share prices disappeared so as a service to the Blog I decided to keep-up clarkeng’s good work although I seldom manage to do so on a daily basis.

But I’ve just had a look at the markets and note that Rangers share price is 74.5 which is still below the psychologically important launch price of 76p. Unusually the last 3 trades have been ‘buys’ at 74.60 and I wonder if there is an effort to stop the shares going further ‘south’ and going below the 70p that fans paid for them. I’m not saying that fans are in it for the money but the Darkside was ecstatic as the shares climbed to 94p and I haven’t seen a single tweet since they began falling.

Another cause for great jubilation was the Rangers Market Cap being greater than that of Celtic and how important this was in financial health terms – it isn’t btw – but again I have seen no mention of Market Cap since the share price started falling and today Rangers Market Cap has dropped to £48.50 million.

Just for the record and in keeping with clarkeng’s system: Today’s Celtic share price is 62p and the club’s Market Cap is £56.49 million. The price hasn’t collapsed as predicted by clarkeng and, indeed, I wonder when the Rangers share price will fall below that of Celtic as has happened with Market Cap.

I just had another look to check how things closed and see that 100,000 shares were sold not long before the AIM market closed at 72p which is fast approaching the 70p price that fans bought at. Doesn’t look as though the market is too happy about the prospects for Rangers shares or perhaps they are proving ideal for shorting.

Posted by Ecojon

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36 Comments

Filed under Guest Posts, Rangers

36 responses to “Ecojon’s Rangers Share Update

  1. Vampire Squid

    Probably easier just to show the chart:

    http://imgur.com/YTmrq3G

    From that, I’d speculate that the recent decline is probably a funding trade into the new tax year. It’s a popular strategy among smallcap investors to cut your winners to cover the loss margin on your losers — and RFC remains, albeit by 0.5p, a winner from its IPO price.

    The other factor, of course, is Rangers’ interim results on March 4. These were extremely poor. But the market’s sanguine reaction on the day suggests investors know what they bought. The recent decline is more likely to be a function of liquidity than a belated realisation that RFC is an absolutely terrible investment proposition.

    • ecojon

      @Vampire Squid

      The Interim Results on 4 March actually showed by a 2p drop a couple of days later but again support came in – trading is so thin with Rangers Shares that a handful of them can affect the price.

      From mid-Feb until 4 March the shares were maintained at just under 80p and then by 6 March they had fallen to 77p but quickly received support to 79p the next day and settled around 78p until 19 March when the recent slump began which saw them at 71p for a spell yesterday.

      Obviously the institutional investors have a lot of these shares in various investment vehicles for their clients and that adds pressure if the shares continue to slide. I am sure a lot of the 1p purchasers who were the original TRFCL investors will be locked in for another three months but as most have no emotional attachment to the club it seems fairly likely they will take their profit and go when they can particulalrly if the price keeps edging down.

      It’s all very well saying they’ll still make a profit cause they bought at a penny but looking at Chuckle’s 5 million shares he’s lost £1 million since the first week in January when the shares were at 94p. And the Rangers Market Cap has also dropped by £15 million.

      • Vampire Squid

        So we’re agreed that current liquidity is so low that the daily twitches of the share price are nearly irrelevant. My only intention was to suggest a reason for the drift lower ahead of April 1: smalltime profit taking in a very thin market ahead of the tax year ending. There might be another reason, but that’s the obvious one.

        It’s true to say that, when the pre-IPO investor lockups come off, many will sell. That’s the game. You’ll remember the same thing happening amid much fanfare to Facebook in November, but it happens to all recently floated companies. The early investor overhang a source of short-term volatility. That’s all.

        You seem fixated on the idea that the market value of RFC is too high. Broadly, I agree. But it’s tinfoil-hatted nonsense to jump from there to an assumption that the price has been artificially supported by clandestine means. If you really believe that, please contact the FSA’s market abuse division and share your evidence.

        • ecojon

          @Vampire Squid

          I can assure you that if I had any evidence of market abuse then I would have no hesitation of reporting it even though I know that the likelihood of AIM actually doing much about it is problematic IMO.

          I don’t think I’m fixated on the idea that the market value is too high – it is and it’s as simple as that and doesn’t need fixation to make it so.

          What isn’t tinfoil-hatted nonsense is that markets have ‘insiders’ who know a lot about what is going on and have all sorts of info and connections with deals happening which suits those concerned. There needn’t be anything wrong in that in a legal sense however morally it stinks because a lot of the ‘wheezes’ rely on the gullible and ignorant ‘outsiders’ whose money is hoovered-up and turned into profit for the savvy insiders.

          On daily twitches they are pretty meaningless in the case of Rangers International and that’s why using 3, 6 and 12 month graphs are much more useful as you demonstrate with the one posted.

          The real interesting time for me will come at the 6 month mark and slightly beyond that. A major factor will be the operating loss and whether it can be brought under control. If not, the AIM proceeds will have to feed the deficit which means that many of the schemes requiring expenditure, listed in the Prospectus, just can’t happen.

          The big problem starts to loom a bit further on when the warchest will be needed for the SPL because ST sales would collapse, as would attendances, if Rangers were getting skelped week in week out by SPL other teams. So that warchest needs filled and I reckon the only way to do it is with another flotation.

          But will it work and who will buy because by then the lock will be off everything and its almost inevitable that the dilution will further depress share price. I’m not sure that institutional investors will be so keen again and by then there will be at least one set of full accounts and maybe another 6 months. It should also be clear whether the goal of restricting first team wages to 26% as I believe was mentioned at the pre-launch investment marketing pitches has been met. Personally I can’t see it and I even think 30% is a pipe dream.

          So that leaves the fans – but if little of the first flotation dosh has been spent on doing what was promised in the Prospectus – will they really put much in it. And there is the question that if the general economy is still weak can they afford to as mortgage/rent, food and heating become the main priorities?

          Chico has displayed, in the past, that he can raise money from the markets but a longer term look at his business career points to some examples where this ‘midas touch’ fades quite rapidly and the caravan moves on.

      • I’d argue that Mr Green hasn’t ‘lost’ a thing, since his lock-in means he couldnt sell then and cant sell now – he’s not involved in this market for these shares – not at the moment as far as we know.

        Its the folks who can buy and sell who are playing in this market, and its those guys who may be viewed as having ‘lost’ out.

        My general view of the whole situation re share price is that very small proportions of the overall share numbers out there are being traded. There’s not really a market of any significance at the moment – clearly not one that any sound conclusions can be drawn from.

        • ecojon

          @Carl31

          In general agree with what you say. However lock-ins aren’t absolute as people can be sacked or even take ill and walk away from a lock-in. I don’t suggest for a moment that that might happen to Chuckles but it can happen.

          And as one can never be sure when things happen out of the blue there is IMO opinion a valid concept that a ‘loss’ can actually occur. But it’s not one I’ll lose sleep over although I have to say I think Chucky might have more difficulty in accepting he isn’t £1 million down on what his shares were worth in January.

          But perhaps not – after all it isn’t his money as he’s leaving his shares to his grandchildren or so he says 🙂

  2. Monti

    Let’s hope the the Rangers share price stands at 5p come close of business….i would be gutted…ahem!

  3. Coyote Briggs

    Dwangs and Noggings. Ahh, brings me back to my apprenticeship.

    The great debate amongst joiners/ chippies on their travels.

    Dwangs all the way Paul.

  4. Fisiani

    The market is ruled by greed and emotion.
    The flotation of The Rangers had two types of investor.
    The emotional and the rational.
    The emotional paid 76p and gleefully saw their investment rise to 94p.
    The rational institutional investors calmly sold their shares at 94p and made 180 pounds for every 1000 that they invested. A whopping 18% return on capital for just 6 months. The equivalent of a 36% annualised return. Hard to get such a return anywhere else in the beleagured British economy.
    As a Celtic supporter but a rational investor I have made quite a profit by buying and selling The Rangers shares. Not quite 18% but an average 14%.
    The Follow Follow spent 1000 and when it reaches 70p they will have lost 60 pounds if they sell,
    They will never sell, surrender or walk away.
    When the share price reaches 60p then they will have lost 160 pounds.
    When it reaches 50p they will have lost 260 pounds.
    When you buy assets for 5.5 million then claim that they are worth 60 miillion some people will actually believe it. It has been a pleasure, a financially rewarding pleasure, to take money out of their wallets.
    Never give a sucker a break.

    • ecojon

      @Fisiani

      You are totally correct about the two types of investor. I actually pointed out at the end of last year that Bears should take their profit by selling their Rangers shares and buy them back when the price fell as I anticipated it doing.

      This strategy would have increased the percentage shareholding held by the fans and given them a bit more of a voice which I think is good for any football club.

      I’m fairly certain that my advice was ignored 🙂

      The sad thing about football clubs and shares is that the concept of selling shares in a holding company that own the football club operating company is relatively new and so few fans even yet seem to grasp what they are actually pouring their hard-earned cash into.

      Chuckles was quite clear that the shareholding would be structured so that no one individual could control the holding company which obviously can make things a lot easier for a CEO to pursue whatever their agenda is with little chance of an organised bloc of shareholders being able to act,

      But it appears after his spat with Malcolm Murray that there was enough support for the chairman to make his step away from at least an immediate confrontation.

      Still it’s nice to know that some Celtic supporters have made a killing from the Rangers shares and I feel confident that you aren’t alone.

  5. TheBlackKnight

    Ecojon,

    I am reliably informed that most (if not all) of the ‘trade’ has been between brokers. They have been “off book”.

    There is no real Market interest currently. Now, that may change once restrictions/ tie ins from “promissory investors” are lifted… Interesting couple of months coming up ..

    • ecojon

      @TheBlackKnight

      Yea that would explain quite a bit as I have been fairly sure that the spivs will be working away to ensure they make as much as possible in as short a time as possible.

      The volume traded has been very low with very small packets of shares the norm except for the approx five blocks of 100,000.

      Any thoughts on what might trigger a release from the original TRFCL investors or would that just be a time think similar to a 6 month lock-in?

  6. The drop in price was inevitable as most commenters here have agreed, its just the market and in particular football clubs. With little prospect of the former greatness returning any time soon and the weekly bleeding of funds that are unsustainable going forward with 3rd tier football and low returns again promised the exodus of trimming costs is ongoing.

    Chief football scout suspended for transfer dealing allegedly, physio and stadium manager along with many others being removed in chuckys “restructuring”. This shows the cracks in the company to any layman never mind financially astute investors.

    If you have nt got the income and its nowhere to be seen in the future then its base survival as an emergency action.

    The majority of shares “gifted” at 1p or less will be happy enough to hang in there, the punters will be shown as was stated clearly here as the ones who yet again put their money where theeir mouth is and lost out again.

    The bears may have saved their football for a while but this time at what cost? Poorest rangers footballing side ever with no prospect of better players no matter what anyone says, (simply no money to pay for them, and no interest to play for a dying club) and they will struggle even more in the third tier of Scottish football for another season playing better teams then they encounters this seaon so no definate promotion in 12 months time, even with any league restructure. No one wants them shipped up a league other than chucky because he needs the revenue more than we need him r his team.

    Tick tick tick……….

  7. Paulreverecsc

    I tried to short them a few weeks ago on the Spread betting market but couldn’t get a quote!

    • ecojon

      @Paulreverecsc

      I would take a guess that the spivs will be making sure that no outsiders get their sticky fingers in the honey jar 🙂

  8. Monti

    I see Sevco 5088 have suspended Chief Scout Neil Murray,Chuckles not impressed by his abilities to spot talent apparently….Sally is backing Neil Murray! Tick tick tick…….The the Rangers/ Sevco 5088 are in Scotland’s bottom tier & play Montrose tomorrow…..

    • ecojon

      @Monti

      Not just the chief scout possibly for the off but the physio and possibly the stadium manager and wasn’t there a youth coach as well not to speak of Sandaza.

      Interesting thing about Neil Murray is the paper is reporting it not as a failure to pick talent but because of, shall we say, some inconsistencies over the transfers which emerged in emails sent at that time. I should say that Murray denies any wrongdoing and appears mystified by the allegations.

      It may well be that this spirals out of Chico’s control as someone might ask for StrathPol to investigate if any whiff of criminal activity is suggested and of course there is always the possibility that Zinoviev Publishing has been busy 🙂

    • portpower

      weather permitting?

    • Monti
      March 29, 2013 at 9:40 am
      I see Sevco 5088 have suspended Chief Scout Neil Murray,Chuckles not impressed by his abilities to spot talent apparently….Sally is backing Neil Murray! Tick tick tick…….

      The “The” Rangers/Sevco 5088 are in Scotland’s bottom tier & play Montrose tomorrow…..
      ======================================================

      Should be a barrel of laughs!

      Train wreck 2 is riveting.

      Not long now.

  9. Very good synopsis Ecojon, my own view sides with that of the short selling.

    Traders are a shrewd bunch and they know there is such a vast wealth to be generated around the cash cow that is sevco fc.

    The most recent trades will be the locking in of an immense profit to pay for the Easter fizz and crepes.

    The downside to this is that none of this immense profit benefits the third division football club or the sevconians.

    A peaceful Easter to one and all and very well done to sevco fc on possibly ,maybe, winning their first ever title this weekend.

  10. portpower

    Has wally smith jumped a sinking ship?

  11. Pingback: CNBC Quotes Rangers Shareholder – “Rangers FC – The Best Investment in Soccer” | Random Thoughts Re Scots Law by Paul McConville

  12. ner57

    The difference between a dwang and a noggin is similar to the dook or plug issue,but sarkin stands alone.

  13. TheBlackFlappyGoose

    It’s evident from the above you don’t have a clue about stockmarkets & more specifically the AIM market.

    To keep it simple for you.. Shares in AIM market don’t have liquidity as say for example FTSE listed securities. It was inevitable that a number of shares would be sold after the IPO as some investors looked to bank a substantial profit.

    The key point you don’t pick up on is that to sell a share on the AIM market you have to have a matching buyer. No buyers. Shares will not be sold. The fact that shares have been trading quite vigorously on this market is good news for investors. There is interest there as the shares are being picked up.

    As Rangers move up leagues the share price will move up. It will flatten out at some point.. Simple economics. But it’s a good long term investment..for fans as well as quick buck makers.

    • ecojon

      @TheBlackFlappyGoose

      Vigorous trading? There’s virtually nothing happening with the shares the volumes are tiny especially if you take out the 5/6 100,000 trades.

      You must be looking at another share because it most certainly isn’t the Rangers International shares you are talking about.

      Good long term investments seldom make quick-buck takers happy IMO. The only thing I agree with what you have said is that: ‘It will flatten out at some point . . . Simple economics’.

      It most certainly will LMAO 🙂 🙂

    • tykebhoy

      Have to find a matching buyer? Hmm, not many people interested in buying in what is just above the IPO purchase price even though the minimum purchase is now much less. Smells of sellers having to drop their asking price to me. Not much interest or confidence in the product it seems amongst buyers.

      For the share price to move up there will have to be a move up through the divisions while making less of an operational loss?? Under the current corporate, operational and football management structures I’d say those two are mutually exclusive unless of course the SFL ignores some more of its rules (non EU player quota and over 21 quotas for example).

      Beware potentil investors Mr Murray insisted shareholding in his Rangers was a good long term investment before rendering the shares almost worthless by flogging 85% for a quid. They are now totally worthless as the company is in liquidation.

  14. portpower

    Will sevconians claim for false implants?

  15. ecojon

    @portpower

    Why shouldn’t they – they claim for everything else 🙂

  16. Ed

    Thanks for the posts guys – I’m trying to get my head round what it all means though. Surely Mr Green’s desperate rantings about getting in to the EPL or ANYOTHERLEAGUE is an indication that Stockbridge is worried about the club’s ability to remain liquid over the next two years. Yes they had £22m in the bank at Dec 12, but that is moving south at the rate of £1m per month. Where is all the fresh revenue promised by Charles? Ecojon – is the market resigned to Rangers climbing back to the SPL and anticipating a Rights Issue to compete with Celtic once they get there? Charles says he won’t burden the club with bank debt. Thank you.

  17. michaelk1888
    March 29, 2013 at 8:22 am

    “Poorest Rangers footballing side ever with no prospect of better players no matter what anyone says, (simply no money to pay for them, and no interest to play for a dying club) and they will struggle even more in the third tier of Scottish football for another season playing better teams then they encounters this seaon so no definate promotion in 12 months time, even with any league restructure. No one wants them shipped up a league other than chucky because he needs the revenue more than we need him r his team”.

    Tick tick tick……….
    =======================================================

    …and tock.

    Not long now.

  18. The filth,the stench & sickening presence of sevco is there for all to see and sample, i am reminded of the “WISE EASTERN PROVERB” that i learned in St Lawrences RC school in GREENOCK SCOTLAND,in the late 1950s,GOD BLESS SISTER MARY PAUL & BLESS HER MEMORY, please google the wise eastern proverb SEVCO FANS & learn of your fate,

  19. Dhougal

    Great stuff as usual Paul &Eco ……….i was just starting to understand some o it when my head exploded …….but think i got the gist o ít ……………HERE WE GO AGAIN !!!!!! GBCG Dont know wots the funniest ….Mrs Browns boys or Mr Greens deluded ?????

  20. joe

    I like reading all the blogs from various posters with some i can understand others i cant so easily,it all gets rather confusing to say the least!Would it be possible to see some spider graphs(dunno if thats right guys!)so we can see how this is all structured where cash is going,who owns what part of which company and so forth,i think trying to put a graph together regarding this will take time and effort,and would be appreciated,it would be interesting to see and make things easier to understand just how it all fits together!keep the good work up guys.thanks and have a good easter weekend!

  21. Fra

    We have a local park with the sprinklers timed to keep it as lush as possible. If sevco die again, we can christen them Lazarus and allow them to play at their new level which is just below boys club level although I believe Sally would somehow mange to cock that up as well. TICK TOCK TICK TOCK

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