Cardiff Looks Likely to Float

http://www.walesonline.co.uk/sport/football/football-news/cardiff-city-owner-vincent-tan-4048967

Any financial whizzes out there who can explain the pros and cons of such a venture?

Interesting indeed...


I'm also kind of scared by this...yes, anyone want to stab a guess at explaining it?

We either float or we sink.

As I see it, VT in the first instance would have to convert his loans to equity (shares). On floating the company, these shares would acquire an initial value which could increase / decrease. This is the risk he has to quantify.

If the venture looks attractive to potential investors and there is demand from these to invest, then you would expect the share price to rise and VT's investment to increase in value.

Extra money is being put into the club, which is to everyone's benefit if used wisely.

Assuming the club continues to do well, the share price will hold up, but should the plan go t*ts up and we get relegated, then in all probability the value of each share will fall and VT is in real danger of facing a loss.

I would be worried if following a floatation VT was effectively selling his own shareholding to new investors and reducing his exposure accordingly.

TDA wrote:As I see it, VT in the first instance would have to convert his loans to equity (shares). On floating the company, these shares would acquire an initial value which could increase / decrease. This is the risk he has to quantify.

If the venture looks attractive to potential investors and there is demand from these to invest, then you would expect the share price to rise and VT's investment to increase in value.

Extra money is being put into the club, which is to everyone's benefit if used wisely.

Assuming the club continues to do well, the share price will hold up, but should the plan go t*ts up and we get relegated, then in all probability the value of each share will fall and VT is in real danger of facing a loss.

I would be worried if following a floatation VT was effectively selling his own shareholding to new investors and reducing his exposure accordingly.

Spot on TDA. A good point to remember if you are worried about this is that Tan made £90million via the same process when Facebook floated.

TDA wrote:As I see it, VT in the first instance would have to convert his loans to equity (shares). On floating the company, these shares would acquire an initial value which could increase / decrease. This is the risk he has to quantify.

If the venture looks attractive to potential investors and there is demand from these to invest, then you would expect the share price to rise and VT's investment to increase in value.

Extra money is being put into the club, which is to everyone's benefit if used wisely.

Assuming the club continues to do well, the share price will hold up, but should the plan go t*ts up and we get relegated, then in all probability the value of each share will fall and VT is in real danger of facing a loss.

I would be worried if following a floatation VT was effectively selling his own shareholding to new investors and reducing his exposure accordingly.

if a newly promoted premier league club in a capital city with potentially a million fans isn't an 'attractive venture' then call me mary push me out to sea cos i don't know what is.

DrewBlue wrote:

TDA wrote:As I see it, VT in the first instance would have to convert his loans to equity (shares). On floating the company, these shares would acquire an initial value which could increase / decrease. This is the risk he has to quantify.

If the venture looks attractive to potential investors and there is demand from these to invest, then you would expect the share price to rise and VT's investment to increase in value.

Extra money is being put into the club, which is to everyone's benefit if used wisely.

Assuming the club continues to do well, the share price will hold up, but should the plan go t*ts up and we get relegated, then in all probability the value of each share will fall and VT is in real danger of facing a loss.

I would be worried if following a floatation VT was effectively selling his own shareholding to new investors and reducing his exposure accordingly.

if a newly promoted premier league club in a capital city with potentially a million fans isn't an 'attractive venture' then call me mary push me out to sea cos i don't know what is.

I've said it before....."Ol' Tan ain't daft!"

he can't be if he was the only person in the world to make money from facebook's floatings

DrewBlue wrote:he can't be if he was the only person in the world to make money from facebook's floatings

Very true

Rhys wrote:

DrewBlue wrote:he can't be if he was the only person in the world to make money from facebook's floatings

Very true

I've done some floatings this morning too, although, I think that has more to do with the spicy chicken I ate last night