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Collectors Universe Inc. Message Board

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  • tradedollarnut tradedollarnut Aug 23, 2002 9:21 PM Flag

    Why so negative here?

    Because if they expensed the stock as salary or bonus they would have lost $800k for the quarter - that's why! The net effect is the same as if they handed (whoever) a huge cash bonus and then sold some treasury stock to pay for it - except as a dilution apparently they are allowed to not have it hit the P&L for now.

    Don't the new accounting standards require that options, etc, be priced at FMV and be expensed?

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    • No it's still elective. Many companies are not expensing options. CLCT appears to be one of the company that aren't.

      That's troubling in itself. In this enviroment it would make sense to show the loss and move on. Instead dilution leads people to think like JJacks that the situation is better than it really is.

      It doesn't help that Johnson's statement asserts that he "returned the company to profitability" without acknowledgeing the dilution. I would think better of him if had spoke to that issue.

      It looks to me that the deal was pre-negotiated and it might have been a bad deal.

      Hey-- to all you guys that are bullish I have another concern...

      In his departure statement as CEO this Johnson stressed a second goal one...

      "to improve the company's systems and processes"

      I'm sure there were serious problems he had to address with the copany's systems and processes" but that fans my fears about the company. As the CEO he didn't focus on marketing and sales? That wasn't a goal worth setting?

      For those paying attention. A successful company is almost always headed by the firm's top sales person. The best CEO's are the rain makers.

      Johnson's stress on "systems and processes" is very off putting. I always tell people ...

      "Bring the money in FIRST. Make sure your systems and processes are as efficient as possible immediately ASAP...but you must bring in the money FIRST and FAST."

      • 1 Reply to JamesD59
      • PCGS was always reknowned for having poor processes. It seemed like coins would get lost on the shelves forever - either before or after grading. There used to be a lot of billing mixups, also. From what I understand, the flow of coins is much smoother and submissions are being processed better, which leads to higher revenues. That is why I predicted a small profit for the quarter (didn't know about the equity dilution).

        My main concern about PCGS is the revenue generated by those record submissions. I suspect that the revenue per coin is dropping due to the submission mix trending toward the lower priced modern coinage. Also, they give away submissions to members of the collectors club and set registry programs and the membership appears to be increasing. Of course, that's a good thing.

        But overall, PCGS has to be significantly profitable, as I suspect is Bowers and Merena. It is the other divisions, and the costs associated with expanding programs and being a public company, that has destroyed the bottom line. It all comes back to the catch 22 of being a public company - growth is demanded and rewarded. I believe they could make the company profitable rather easily but that would mean downsizing and destroying the potential long term payoff. Damned if you do and damned if you don't!

 
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