Rangers FC Shares

garybarlowsbeard

I know very little about shares but a friend has tipped Rangers FC to me at about 25p. From what I can see this rates the company as worth £19m (not sure I'm reading that right) which to me looks great value. Think they floated at about 70p and, as a football man, purely on the strength of the brand I'd think they have to be getting back close to that 70p mark in the next few years as the club returns to the top flight - which they undoubtedly will.

The brand is so strong and the supporter base so big that they can't NOT do well...to my pretty much totally ignorant mind. Does anyone have any thoughts on this?

Cheers
GBB

eskbanker

Despite starting again with a clean financial sheet in the lowest tier of Scottish football, they managed to lose £14.4 million in the 13 month trading period to June 2013 and are reported still to be losing £1 million per month, hence the players being asked to take a 15% wage cut last month amid rumours of re-entering administration.

You're probably right that they'll be back in the top league before long and they are undoubtedly a high-profile brand, but personally I wouldn't go near them with a barge pole when it comes to investing any of my money!

ColdIron

garybarlowsbeard wrote: »

The brand is so strong and the supporter base so big that they can't NOT do well

Presumably the brand and supporter base was the same in 2012 and they've only gone in one direction since then. Shares in a football club are a great way of showing support and a good talking point down the pub but a bad place for a non-supporter to put their money

PeacefulWaters

I wouldn't touch it with my worst enemy's barge pole.

garybarlowsbeard

ColdIron wrote: »

Presumably the brand and supporter base was the same in 2012 and they've only gone in one direction since then. Shares in a football club are a great way of showing support and a good talking point down the pub but a bad place for a non-supporter to put their money

That's a blanket statement and not necessarily true.

I would guess the loss is a necessary investment to gain promotion? Once they get back to the SPL and get the TV and commercial money back one would assume they'd be fine, or certainly do a lot better.

ColdIron

garybarlowsbeard wrote: »

That's a blanket statement and not necessarily true.

I would guess the loss is a necessary investment to gain promotion? Once they get back to the SPL and get the TV and commercial money back one would assume they'd be fine, or certainly do a lot better.

I'm not sure I agree with you that it was a blanket statement though you may well be right about their future performance, I know nothing of football

The point I was trying to make was the fallacy in the argument that they must do well due to the brand and supporter base as if they were correlated when evidence shows that they are not

simonfitba

They are losing about £1m a month and could well need another injection of capital from investors to stay afloat. I'd avoid too.

WestonDave

The general wisdom with most sports clubs is the best way to make a small fortune whilst investing in one is to start with a large fortune! Very few of them are run to make a profit - vanity normally overrules common sense and financial management so that if they want to spend more than they are earning in order to seek on field success, the assumption is that loyal supporters will often stump up cheap cash to bail them out. Its possible that they might show a short term share profit if they rise to the top but as a long term investment its one for the heart not the head.

eskbanker

garybarlowsbeard wrote: »

I would guess the loss is a necessary investment to gain promotion? Once they get back to the SPL and get the TV and commercial money back one would assume they'd be fine, or certainly do a lot better.

If it's the case that that level of investment was necessary to gain promotion, it's not apparent to most Scottish football followers why - last season Rangers were competing against part-time butchers, bakers and candlestick makers and finished no less than 24 points clear. This season it's the same story, currently 23 points clear - played 24, won 23, drawn one - all the time leaving many highly-paid squad players out of the team, so it's not a serious proposition to say that they needed to spend anything like the colour of money they have in order to progress through the divisions when they're streets ahead of the teams they're playing.

Various pronouncements from the club do smack of the vanity referred to above ("we're Rangers, we have thirty thousand season ticket holders who expect a certain standard", etc, etc), all the while paying their manager a massive and disproportionate salary allegedly in £700-800K territory (albeit he's recently agreed to halve it). The parlous off-field situation was reflected in boardroom wrangling and following a lively AGM the finance director has left.

Your money though - it's often pointed out on here that investment in single shares isn't for the faint-hearted and there is little need to conduct any detailed due diligence when Rangers' financial woes are so frequently visible in the public domain! Having said that, I suppose there is the argument that the only way is up, but I still believe that there is a significant risk of total loss if investing....

DaveTheMus

I'm a Rangers fan and I wouldn't invest any money I wouldn't be willing to set on fire.

The directors are a joke, the people running the club are living in the last century.

There are at least 50 people at the club earning over £150'000 a year(in the third tier of Scottish football) and there is talk that we're about to go through another administration.

planteria

yes, it sounds as though things may get worse before they get better. hence the drop in the share price.

money can be made from investing in football club shares though. several of us did very nicely out of Aston Villa and Manchester United shares.