PSA earned $.01 per share or a fraction thereof. It looks like CU had just about a break-even quarter but if not for a $1 million+ write off from the diamond grading business (what were they thinking), it would have been a nice profit. It beats a loss and PSA staying in business is the best thing that could happen for the hobby, graded card values and employees. Think of all the advertising and promotion PSA does for non sports and sports. CU's demise has been greatly exaggerated, imho.
This message has been edited by djrauctions on Sep 9, 2009 1:04 AM This message has been edited by djrauctions on Sep 3, 2009 10:49 AM
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I'm still waiting for the 10K to come out. They only issued a brief press release. Basically the Coins Division revenue jumped 14% while the Trading Card and Autograph Division dropped 16%. But that's just revenue and not card submissions, expenses, operating income, etc.
And I believe I said PSA could go out of business, not Collector's Universe, based on a number of events which are still occurring. But I need to see the actual 10K. I don't know what would cause a company to issue a press release weeks before the 10K.
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Hey Eric, just curious why you think PSA is going out of business and not CU? CU is the company that entered into the diamond business and subsequently wrote off the losses. PSA is along for the ride, and Joe Orlando has repeatedly said PSA was not in trouble.
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First off, Joe Orlando is a great advocate for PSA and a tremendous asset for that company. But his statements that PSA is not in trouble are only telling 1/2 the story. While the Operating Income of the PSA Division shows a profit each quarter, the fact is that when their share of Overhead (SG&A or Selling, General and Administrative) is applied, they are clearly losing money. As were all divisions of CU.
To summarize, my premise was that CU would need to sell off PSA to keep the main company afloat and then the new owners would use PSA as a "cash cow" by loosening standards (who doesn't want a high grade) and cutting back on expenses which would cause a drop in confidence and an eventual demise for the company. Other factors would come into play such as competition, the fact that when a card is graded it does not usually need to be graded again, change in consumer needs to a different grading model, counterfeits, and an increasing warranty need from the tremendous increase in trimmed cards getting through PSA which is becoming the go-to company for fraud.
Since my first post almost a year ago, CU has sold off or shut down the other divisions, but PSA stayed. I figured it was going to be the other way. Remember, the CU owners are Coin guys at heart. But they may be trying to use PSA as their own "cash cow" as they have cut expenses. That remains to be seen.
But the 10K just came out and while Coins were good, Cards were not. But I can't pull the exact P&L numbers since they merged autographs with cards in the latest breakout. I'll make an update eventually, but it's not high on my todo list.
But that being said, I changed course and am a bit bullish on CU as a company. I think they may have turned things around and can make a profit. If so, they won't have to record or pay taxes based upon their Deferred tax Assets and may even be able to reverse their Valuation allowance. That would bode well for them in 2010.
But PSA, the Division, is still in trouble. It remains to be seen how much damage will come from the Markel Report and I don't think their warranty reserves are adequate. CU may still want to dump PSA to avoid huge claims. Plus if you look at independent companies that track sales of PSA vs SGC you will see that now, most SGC cards of the same grade sell for higher than PSA. But the PSA Set Registry keeps so many folks coming back.
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"most SGC cards of the same grade sells for higher than PSA"
Eric, please put your left hand on the bible and raise your right hand and repeat after me. Do you swear to tell the truth the whole truth and nothing but the truth so help you god?
All due respect Eric but do you really believe that Sgc cards of the same grade sells for more them Psa cards of the same grade?
This message has been edited by PSUinCT on Sep 4, 2009 12:44 PM This message has been edited by PSUinCT on Sep 4, 2009 12:43 PM
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Absolutely. Maybe I should qualify though. I am referring to vintage cards. PSA has cornered the Pokemon, Star Wars, and Bench Warmer market. Although it always baffles me why someone would grade cards that even in PSA 9 condition still sell for less than the cost of grading.
And PSA still rules on the high-end condition T206's
Edited to add: This has come up before. Time to go to the source. I'll go to VCP and get a membership and pull some data. They don't have much non-sport, maybe N2's and other Allen & Ginter's. Regular (not Honus) T206's, N28's, Mayo football, Goudey's, and whatever else has the most data.
This message has been edited by egbeachley on Sep 4, 2009 1:46 PM
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Jim, you are probably right about the 9's and 10's, and that's purely a result of the people playing on the registry. No one wants to pay for a SGC high grade for their registry set if it may not cross over in the same grade.
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"Operating Income of the PSA Division shows a profit each quarter, the fact is that when their share of Overhead (SG&A or Selling, General and Administrative) is applied, they are clearly losing money. As were all divisions of CU. "
I think you mean that Gross Profit shows a profit. Operating income includes SG&A.
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Thanks John. I should be more clearer. They call it "Operating Income before unallocated expenses" which I take to mean the SG&A of the Corporate offices.
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CGC very much penalizes for yellowing or toning in stark contrast to the card grading companies. But CGC has lower standards for golden age comics from the forties than it applies to modern comics! So NM is not the same NM for all! Go figure.
This message has been edited by Balticprince on Oct 15, 2009 1:35 PM This message has been edited by Balticprince on Oct 15, 2009 1:35 PM
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hey dave,
nope not rich yet... spending all my money building my mars attacks set to psa 8.0 gpa, prob will go broke before getting rich haha
love and laughter,
slacker
ps think my target sell price is gonna be $10.00 on clct
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Slacker - you have quite a hill to climb on the Mars Attacks set! The prices realized for 8's are way up there, not to mention 9's. Best of luck in your journey, you're almost there.
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thanks dave,
yeah i just won my first psa 9 mars attack card, prices on psa 8s are surreal, i have a second set #37 on psa set reg i'm looking to sell now to raise more coin, on the bright side clct is climbing towards 8.00 pretty fast now.
love and laughter,
slacker
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