Quote:
Originally Posted by Peter_Spaeth
I agree with Howard there likely was a defensive motivation as part of the equation. That said, I think you're (1) underestimating the huge revenues they would make from crossover if they eventually discontinue the brand and (2) overestimating any loss of market share. There's noplace else to go, people who want slabbed cards for the most part are going to submit to PSA in my opinion if there is no SGC per se. And I think there likely are efficiencies to be gained by folding in the SGC brand vs. inefficiencies in propping up two brands one of which is small. That said, I have no idea.
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Peter, the huge revenues are a one-time event. I suppose if they make enough to reimburse what they paid for SGC, then it’s a wash. But that seems dumb to pay good money for a company hoping you recoup your purchase price from crossover fees as you kill the company.
Inversely, SGC has intrinsic value and income stream. You can earn a return from operating it now, and likely increase that return (and PSA profits) by combining efficiencies.
Buying SGC for one-time cross-over revenue is short term gain for long term pain, or maybe break even. Running SGC, which is growing, and maximizing efficiencies is a short term gain and long term gain.
And, I do believe PSA will lose some market share if they shut down SGC. Those collectors, and many in prewar/vintage are collectors (vs investors) don’t care so much about the flip and will move the CGC. Hake’s has some prewar item, including to Baltimore News Cards, that look real nice in CGC flips.