seeking alpha article Collectors Universe - A Scandal Waiting To Be Exposed
 

Interesting.

If like me you have the site get stuck and refuse to go to page 3 or 4 you can manually change the page number in the URL and get there.

this shouldn't help their stock much!

It's just another social media or news outlet trying to jump on this scandal bandwagon for click bait. Nothing new that has not been said already.

Yes, but a new audience.

Also a lot of insider sell trading end of last year....

It was up a little this morning, down almost 3% right now.

Thinly traded stock, a few trades can move it, if it's going to crash that isn't it.

Sell volume starting to pick up
 

Thinly traded so far. Volume picking up. Mostly sellers and few buyers. Wonder if the hedge funds that own have read the article? I think it drops to $10 soon. Insiders trapped. Maybe we see a pr on this soon.

Down over 5% as of right now (12:35 PDT).

Almost 6% with a few more minutes of trading.

Reminds me of this....

first a 10% trim job earlier in the week and now this. Still way up from the beginning of the year, but I wouldn't want to be involved.

Lost another 1 % in the last minute. While nasdaq was up .05% today these idiot jerk offs lost another 7%.

I read Seeking Alpha articles any time they post on a stock I follow. I do not know how many people read them - generally I find them interesting takes on the landscape a company is facing and consider them to be well written. They used to come up on the stock feeds on the IPhone before Apple disconnected their ticker from Yahoo Finance.

The article mentions worthpoint for doing research. Does anyone actually use worthpoint?

I have used it many times mostly for art and antiques I am too cheap to pay for the subscription...But it is a very valuable service

Well, before PWCC was nice enough to give us better access for free, I used to. PSA's tool is only good for front scans, most of the time, since eBay links are usually broken or the sellers do not list them.

Given how close to the floor this board is, one consideration would be to keep the stock on watch and wait until it makes sense as a long.

Too early but an intermediate contrarian play on op leverage cheapness.

Any guesses on bottom?
 

THe volume was up slightly today. From 50k to 85k. Wondering what happens if some (or even just 1) of the larger holders dumps. I am expecting class action lawsuit to drop soon. That will be eye opening. I sent all the links to the major short funds.

Can you send the Beckett and SSI threads here too?
https://www.dps.texas.gov/CriminalIn...ions/index.htm

Let me know who they assign to the case.

I bet the guarantee seemed like a good idea at the time. I have to believe they have known for a long long time that there was at least potential for liability well over and above the reserve -- it seems likely they were aware of the volume of doctored cards in the hobby and they can only do so much to keep them out -- but they probably never anticipated it could come to the forefront so quickly and dramatically. I would think that, more than the prospect of reduced revenues, would be the concern of a large investor at this point.

If the stock takes too big a hit there might be a way to fashion a securities fraud suit against CU, as well as whatever collector suits against PSA people are considering.

there's not enough liquidity for a major short fund (if there are any major ones left outside of kynikos) to establish a significant short position.

I'm the owner of a very small business & can't imagine the amount of requests for returns & reimbursement that must be going on between PWWC & PSA.

Given their largest holder is an algo, they could be dumping right now because it's most likely failing its momo program.

And remember, barely anyone knows about this scandal yet.

Granted I don't know who you are but once again, as someone who specialized in complex class action litigation, do enjoy the next 12 years as you slowly track a never-ending case. Even if it drops soon and it's eye opening there won't be a resolution for a very long time.

I've been involved in some that are worse than the case parodied in Bleak House. I'd be interested to hear about a class action against PSA (other than for securities fraud by shareholders) that didn't have predominance issues. My gut reaction, admittedly biased from being on the defense side of these, is that when people talk about class actions and bandy about the prospect of class actions they don't usually understand the requirements.

A mass action of a few dozen aggrieved purchasers in state court would be way more fun.

Mass instead of class works for me.

At what point does the company have to issue a pr?
 

This is material information in my opinion. When will they be obligated to speak to it publicly.

Duty to update outside of regular quarterly reporting is a complex disclosure issue. Supreme Court just ducked it recently too. If you're interested this is a typical summary of the conflicting principles and law.

https://www.akingump.com/en/experien...-case-law.html

Great info!
 

The knowledge here is amazing. Thanks.

At a minimum any stock sells by insiders would be highly suspect. A public disclosure of major inside selling would raise more than a few eyebrows.

If they have planned sales not so much, but otherwise yes.

I too have been on the defense side. Who knows we might have actually worked together! Many are quick to say "class action" when they in fact haven't a clue as to how much actually goes into certifying a class before any sort of action happens. Not to mention everything with MDL. Could be years.

I prefer Worthpoint because it also includes ungraded, memorabilia and basically anything else you want to look up.

For us non- lawyers.... What's a predominance issue?

Sorry. One of several requirements to maintain a class action is that common issues must "predominate" over individualized ones. Translated, that means roughly that you need to be able to establish liability towards the entire class by common proof and each plaintiff doesn't have to present his or her case. For example, everyone who bought the stock is injured if the company issued false financials and inflated the stock price. Each member of the class was hurt in the same way because the drug was inherently dangerous, or the car had a manufacturing defect.

But if the question is were people hurt because PSA failed to catch altered cards, or stiffed people on the guarantee, or was bad at grading, that feels to me like each and every person would have to show that on a case by case/card by card basis, even if there was an overall pattern. Just showing the pattern doesn't prove YOU were wronged. You would need to show that YOUR card was misgraded or altered or that YOU were stiffed on the guarantee. If that's the case, individualized issues "predominate" over common ones. If the case has to proceed as a boatload of mini-trials, it doesn't warrant class treatment.

Somewhat simplified but that is the idea.

From an accounting perspective, there is nothing needed to be disclosed, yet.

Deemed contingent liability, it needs to be recorded and disclosed if the liability meets more than likelihood possibility. Although there there may be an inquiry, if there is not yet direct investigation yet of PSA's subsidiary, it is still in discovery and too early to determine liklihood; allowing the company to take the generic "ordinary course" liability disclosure in its notes. Auditors and SEC would sign off as long as there is not enough information to determine the extent of the liability.

Would like to see the Q&A transcript for the Q if they have earnings calls. Is there any brokers that cover them?

If you are talking about a Fed. R. Civ. P. 23(b)(3) class, not in the context of a securities fraud claim, I think you might have commonality issues too, particularly in the 9th Circuit. If you could avoid that bullshit CAFA and keep it in state court, maybe. Only Oregon residents suing PWCC? I would think that PWCC has its principal place of business there so you might be able to avoid diversity. But what about the rest? IMO, fraud claims are just hard to get certified, having tried and failed a couple of times. Maybe breach of contract? Or, as Adam suggested, mass tort filings? I don't know. I'll stick to insurance bad faith and let you class action lawyers figure it out.

Kenny yeah you might even get hung on 23(a) typicality. IMO, tough sledding to certify a class for the type of claims I am thinking about, other than 10b5 which, if the facts were there, would be easy. I think if you could get a bunch of plaintiffs together Adam's idea is a good one.

Thanks, what a joke. They have no sell side brokers covering the stock. No one was on the Q&A. I guess there is no one to hold their feet to the fire.

If anyone knows if there are any brokers covering, please let me know...

I was thinking claims against PSA so California would be the state court venue.

Still the 9th Circuit. Same problems although the proposed class would probably be much larger. Just not seeing it on a consumer fraud claim.

Agreed.

“Smart” money vs other
 

Seems as though the smart money has figured out what is going on at psa. Makes me wonder how many people will stop submissions to psa and how many will stop bidding on high end cards in auctions. Finally, Psa has to be super paranoid about fueling the fire by giving high grades to trimmed and doctored cards.

Anyone here glad that they lost to another bidder in a recent auction? Anyone planning to stop buying until more clarity achieved?

Yes. In the meantime I'll be working on my 1975 Topps set. I love those stupid borders.

And.... any trimmed cards could be just part of the 1975 minis set!
I do have some nice (untrimmed) raw ones though, if you are interested though (or have a want list).

Thanks!

Simplified is probably best for us non- lawyers... :D

Up 70 cents today so far. It may crash but it isn't going to be linear absent some much bigger bombshell than a blog post.

Any time. People who don't know the law love to throw around the prospect of class actions but sometimes it isn't that simple.

Keep trying, counselor.

LOL I get it.

It's always good to know real experts, especially people who can simplify complex things in specialized areas.

I have a friend/acquaintance who ended up becoming an "expert" in private radio/tv antennas. When she was a new lawyer she got handed a case where a good client of the firm had put up a 40ft ham radio tower in his backyard and the HOA wasn't happy. She checked a few things, told him she might be able to save the tower, but it could be very expensive, so how far was he willing to go. He gave her a pretty shocking number as a probable limit to the cost. (I think it was something like 5 million!)
Using that she approached the HOA and said they would probably win, but he was willing to go as far as $X to fight it and the choice was theirs.

Tower approved!

Then they started getting requests from his also rich radio friends... So she became the go-to person for radio antennas in backyards.

All very well said Peter!

The company is not covered by any major (or minor) sell side research firms. It’s just too small, illiquid and tightly held for an investment bank to research. The only company that covers it research wise is a general IR firm. Seeking Alpha will help get the word out but larger Wall Street firms typically take their view with a grain of salt.

It wouldn't surprise me if the guy who wrote the article has already closed out his put position. The open interest has dropped significantly on the January 2020 puts. Obviously the article was an attempt to get a run on the stock and for a trading opportunity for him. The high of the day was $19.72 the day of the article so it will be interesting to see if CLCT can get through there. If it does they are going run this right back up as the shorts cover.

For those that don't know options essentially it is a zero sum game. Somebody wins and somebody loses. When the open interest drops that means someone has cleared out their trade. Judging by the action in the puts the buyers are doomed. The bid ask spread on the January 2020 $15's is $0.60 by $1.25 and you would have to be a total moron to buy an option with such a low open interest and a spread that puts you down over 50% the second you buy. Many options you can get executed in the spread but on options like this there is no incentive with such low liquidity.

CLCT is going to need some really bad news to break below $17.55. There was huge volume that came into the stock on May 2nd and it bounced right off that level on this bear raid.

As I just posted elsewhere CLCT is back around 19.50. It's the Wild West out there and nothing stops people from posting short attacks.

just trying to derail

look at poor ole TEUM! I believe trading was halted the other day after a 30% drop.

Listed on Russell 2k THE VERY NEXT DAY

Short attack, gave me a shart attack

Not familiar with this stock but just looked it up and there is huge short interest and it increased by over 20% the last update. My system is showing just under 25% of the float short and nearly 25 million shares.

This is a dangerous stock that is for sure looking at the longer term chart. Good luck with your trade.

You would never know anything was going on looking at this chart. This could get back to $21 in a blink of an eye and $17.65 is a long ways from there and if it does the puts will be toast.

It will be very interesting to see what happens to CLCT in the next few days. It just traded at a recent high from this sell off and I see the fresh short data out today has increased significantly.

There was a block of 22k shares that crossed today above the bid that got it moving mid day.

CLCT ran right back up to $21

I was giving this some thought yesterday and one thing that has happened since this card development is the metals markets have moved significantly higher. Gold and silver prices have been very strong. With CLCT having around 2/3 of their revenue from coins this could be a very bullish development for the company.

CLCT has completely filled the gap from last February.

The stock has a float of 7.22 million shares and it traded 1,136,700 on the day of the Russell rebalance. That is 15.7% of the float and huge turnover.

The filings will start coming in soon so it will be interesting to see how this liquidity even took place.

If the market makers took a huge short position this could turn into a big squeeze play with the top of the down move at $28.

There are 300 contracts of the July $20 and $22.50 strike written combined so there is a synthetic short position of another 30,000 shares that expire July 19th.

This will be a very fascinating situation to watch because there is no liquidity in this stock and as I have said the ultimate type of stock for a short squeeze. Recent data was only 66,000 shares but enough to do some damage and these other two issues could throw serious gas on a fire.

I'm not keen on all the short and long talk (I only invest in stock/bond funds), but I did find it interesting that the bond rates inverted recently. That's a common indicator of weakness in the market and usually a precursor to a recession.

The rate structure is so complicated right now.

The rest of the world has much lower rates dragging ours lower. In many cases negative. That said the rates in the US will be low forever at this point because the debt is so large the interest expense can't be handled.

The budget deficit has risen for various reasons but the largest is interest expense. People are just not using common sense. When you have 23 trillion of debt and you constantly go to the markets for cash you are at the mercy of the current coupon rate. Our budget is around 4.3 trillion and a two point increase that lasts for five years will add well over 120 billion of interest and it just goes up over time as more debt is issued.

Low rates are here to stay.

I heard an interview the other day with Campbell Harvey (the pioneer of the inverted yield curve theory) and lost my focus about halfway through it. Apparently it's been a pretty consistent indicator though.

Yes it has.

There are always different factors that influence markets and we have been in uncharted territory for years.

I am not sure what to think. Logic would say the business cycle still exists and a slow down of some kind would be natural. On the other hand anyone with a pulse can find a job. The system doesn't have the bad debt that existed in the mid 2000's so if there is a contraction it won't be anywhere near as deep.

Today the jobs numbers came out much stronger than anticipated. It was good news and bad news for markets because stock investors want the FED to lower rates.

I find it hard to see a serious downturn with this strong of job market but anything is possible. We have been battling a weak global economy for quite sometime and the US has been the leader and their weak performance could easily finally catch up with us.

It is really hard to know and most economists have so much position bias based on politics that they aren't much help.

Yeah ask 10 economists you'll get 10 answers. Every day for 20 years I've seen one or more of them predicting imminent doom. Always the same mantra. It's laughable.

In my very brief and small investing career I have found it best to find a good course and stick to it. After I made a few small mistakes I just looked at what Warren Buffett said and went there. So far so good....I am a long term investor though and Buffet has always said he sucks at short term but long term does ok.

With respect to this article in the original post, it doesn't look to have hurt the stock so far.

I believe it was a short attack, not a legitimate news story. Typically those don't have any lasting effect. And yeah, whatever the market knows about the scandal doesn't seem to have affected CLCT a bit.

New short data is out today.

Jumped 121% to 201,500 shares.

Only 110 contracts of open interest in the front month call options and none in September so not being hedged.

These guys better pray this doesn't break $24.60 because it will go parabolic quickly.