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

[Peter_Spaeth]

Originally Posted by kateighty

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.

[Exhibitman]

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

[Peter_Spaeth]

Originally Posted by Exhibitman

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

Mass instead of class works for me.

[dwinters]

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

[Peter_Spaeth]

Originally Posted by dwinters

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

[dwinters]

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.

[Peter_Spaeth]

Originally Posted by dwinters

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.

[kateighty]

Originally Posted by Peter_Spaeth

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.

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.

[steve B]

Originally Posted by Peter_Spaeth

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.

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

[Peter_Spaeth]

Originally Posted by steve B

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.

[joshuanip]

Originally Posted by Peter_Spaeth

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?

[Peter_Spaeth]

https://www.nasdaq.com/symbol/clct/call-transcripts

[joshuanip]

Originally Posted by Peter_Spaeth

https://www.nasdaq.com/symbol/clct/call-transcripts

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...

[Peter_Spaeth]

Originally Posted by joshuanip

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...

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.

[Nunzio11]

Originally Posted by joshuanip

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?

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.

[Dpeck100]

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.

[Peter_Spaeth]

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.

[steve B]

Originally Posted by Peter_Spaeth

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.

Thanks!

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

[Peter_Spaeth]

Originally Posted by steve B

Thanks!

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

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.

[calvindog]

Originally Posted by Peter_Spaeth

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.

[Peter_Spaeth]

Originally Posted by calvindog

Keep trying, counselor.

LOL I get it.

[steve B]

Originally Posted by Peter_Spaeth

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.

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.

[kateighty]

All very well said Peter!

[Kenny Cole]

Originally Posted by Peter_Spaeth

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.

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.

[Peter_Spaeth]

Originally Posted by Kenny Cole

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.

[Peter_Spaeth]

Originally Posted by Kenny Cole

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.

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

[Kenny Cole]

Originally Posted by Peter_Spaeth

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.

[Peter_Spaeth]

Originally Posted by Kenny Cole

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.

[dwinters]

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?

[conor912]

Originally Posted by dwinters

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.