RIFC share prices and trades

[forlanssister 3,114]

I think there are a number of reasons for the share price being so low. 1. The boardroom unrest 2. The rumours of cost cutting and administration 3. The league we are in it could go on and on

 

Does anyone know of the top of their heads is there a team in England in a similar position to us and what their share price is?

 

Don't honestly think there's a team down there which could be considered as close enough to make a like for like comparison.

 

The main reason for the price slump is that the original IPO was grossly overpriced added to gross incompetence in the board room.

[Super Cooper 0]

I think there are a number of reasons for the share price being so low. 1. The boardroom unrest 2. The rumours of cost cutting and administration 3. The league we are in it could go on and on

 

Does anyone know of the top of their heads is there a team in England in a similar position to us and what their share price is?

 

There's not a team like the Glasgow Rangers, no not one.

[bluebear54 0]

I really can't see Laxey sitting there happily seeing their investment dwindling.

I worry that there's some other game plan afoot.

[Super Cooper 0]

I really can't see Laxey sitting there happily seeing their investment dwindling.

I worry that there's some other game plan afoot.

 

How much profit do they stand to make from us if we are a top flight club with chance of European football?

[bluebear54 0]

How much profit do they stand to make from us if we are a top flight club with chance of European football?

 

Nothing if the Club is still losing £14m pa.

[the gunslinger 3,366]

you would need to be mad to buy rangers shares just now imho. at any price

[BrahimHemdani 1]

Brahim, you understand these financial dealings.

 

Would it be possible for a scenario to unfold in which the share price is depressed as far as it will go, at which point it would actually be worth buying shares? What I mean is, since certain people got their shares for a penny, and I'd fain see them rewarded with a sale at say 50p, could it happen that their shares are eventually so worthless that we could get shot of them at a penny a go? Seems too good to be true, in one sense.

 

I have a feeling that a share price of about 10p would probably mean another admin event but I confess to not really understanding this whole area.

 

Kind of you to say so!

 

Not sure I fully understand your question(s); but I'd say YES to the first. There are 65 million shares in issue, so right now the market capitalisation of the club is a bit under £20 million. Without getting involved in any of the old arguments, let's assume that RIFC plc and/or RFC Ltd do indeed own Ibrox Stadium and Murray Park; then as per the accounts Rangers assets are £64 million and net assets/shareholders funds £57 million. However, the club was purchased out of administration for £5.5 million. So at first glance the shares way undervalue the assets of the club but at second glance they may still way over value the club. BUT and it's a big BUT, shares like anything else, a house for example, are only worth what someone else will pay for them. There are loads of problems in valuing the shares of a football club, not the least of which is how would you realise the value in the stadium unless you sell it for houses or a supermarket say and what value are the players? £3.5 million according to the accounts. Want to take a bet that you could get £3.5 million for the entire Rangers squad?

 

Another way of valuing shares is EPS (earnings per share). “Earnings” are dividends the company might pay if it makes a profit. So the price you will pay for a share reflects the forecast you or someone else might make about the profits and hence the dividends and the risk involved. Your forecast may be based on certain assumptions, e.g. winning the league, qualifying for Europe etc. So it is important to make accurate assumptions. But football clubs rarely make a profit because they are often run on sentimental rather than business lines and Rangers FC never paid me a dividend in the 30 years I held the shares; whenever they did make a profit they reinvested that money in the infrastructure or the team or both and I like most shareholders I was happy with that. The majority of today’s shareholders however are investors who care not a jot about the history or future of Rangers other than as a vehicle to make money, so their considerations are very different. In any event it would be very difficult to value the shares on an earnings basis.

 

And these are just two considerations!

 

So, is it possible that the price of the shares might go down to 10p, without a doubt it is. If the market takes such a dim view of Rangers prospects that the value of the assets falls still further or there is no prospect of a dividend being paid.

 

However, I am sure that the vast majority of the investors are in this for a short term (say up to 5 years max) capital gain not long term income generation. They would have been looking at the prospect of buying assets on the cheap that would almost certainly become more valuable as and when Rangers return to Europe.

 

If the shares were to go down to 10p or less then almost certainly many people would see that as a buying opportunity and that of itself may create more buyers and hence an increase in the price. If the price then quickly doubled to 20p many of those buyers might take their profit and sell just as quickly. A recent example was RBS.

 

A company goes into administration if it is insolvent i.e. it can’t pay its debts; that is not directly related to its share price. News of trading difficulties may lead to a fall in the share price and ultimately to their suspension in the event of administration; but the fall in share prices is not the cause of the administration.

 

I am not sure if I have answered you question(s) very well but hope the above helps.

[ranger_syntax 4,422]

Not sure I fully understand your question(s); but I'd say YES to the first. There are 65 million shares in issue, so right now the market capitalisation of the club is a bit under £20 million. Without getting involved in any of the old arguments, let's assume that RIFC plc and/or RFC Ltd do indeed own Ibrox Stadium and Murray Park; then as per the accounts Rangers assets are £64 million and net assets/shareholders funds £57 million. However, the club was purchased out of administration for £5.5 million. So at first glance the shares way undervalue the assets of the club but at second glance they may still way over value the club. BUT and it's a big BUT, shares like anything else, a house for example, are only worth what someone else will pay for them. There are loads of problems in valuing the shares of a football club, not the least of which is how would you realise the value in the stadium unless you sell it for houses or a supermarket say and what value are the players? £3.5 million according to the accounts. Want to take a bet that you could get £3.5 million for the entire Rangers squad?

 

Someone suggested to me that the facts highlighted above make it a good time to buy shares in RIFC as they are undervalued at present.

 

I'm sceptical but would any of you feel inclined to invest expecting an increased return when the share price rises?

[BrahimHemdani 1]

Someone suggested to me that the facts highlighted above make it a good time to buy shares in RIFC as they are undervalued at present.

 

I'm sceptical but would any of you feel inclined to invest expecting an increased return when the share price rises?

 

THE FOLLOWING SHOULD NOT BE CONSTRUED AS FINANCIAL ADVICE

 

If the share price rises whether to due to improved financial prospects, sentiment or whatever and you buy now and sell at a higher price than you paid; then of course you will make a profit.

 

However there are so many obstacles in your way e.g:

 

• Can you afford to buy enough shares to make a real difference to you if your strategy is successful?

• Are you willing to take the risk?

• Would you be disciplined enough to set a sale price and stick to it no matter what; the professionals often don't, would you?

• Can you afford to lose some or even all of the money you invest?

 

Remember also that Capital Gains Tax will apply at 18% or 28% (depending on your income) if you make a gain of more than £10,900 at current rates.

 

I gave the analogy of the value of a house. Throughout my 30+ years in financial services, I consistently advised clients to view a house as a place to live in, not an asset to make a profit on. The reason for that is obvious. Since you will always need somewhere to live; if you sold a house in a time of rising prices you would likely have to pay a high price for another and vice versa. The exception is down-sizing in retirement.

 

Of course shares are not the same BUT.......

 

If I was able to offer you financial advice which I am not; then I would urge you to view any investment in shares of Rangers FC as something of sentimental value only, that you might attend the AGM and have your say, hang the certificate on the wall and perhaps hand down from generation to generation. But remember that that was what I thought I was doing with my certificate for 1,000 shares in oldco...............

Edited January 10, 2014 by BrahimHemdani
typos "a gain " & "financial"

[der Berliner 3,803]

Which is why I cannot understand King waiting and waiting and waiting. He can buy the club's share "on the cheap" now, has probably a low interest in selling them anytime soon and slowly but steadily could get the club - still "on the cheap" - back from those hedge fonds chaps and whatnot. IF he cared fore the club in the way he likes to point out, he should step over his shadow (if only for this one instant in his life) and slowly but steadily out of our current state.

That said, he could also buy/lease-back Ibrox or act as financial backer for the club (not the company / board) for the time being.