Brent has left PWCC

[Peter_Spaeth]

Originally Posted by Oscar_Stanage

The loans were ultimately made to customers with cards in the vault. The way asset based lending works, there is a steep haircut relative to the card price. If a customer had $100k market value of cards in the vault, they were likely only able to borrow $60k, maybe less. It’s unclear to me what exposure PWCC had as a firm. The hedge fund provides the capital for PWCC to tap for lending. If the borrower defaults, PWCC simply sells the cards in possession and pays back the hedge fund. In all likelihood , the hedge fund is the direct counterparty to the customer and PWCC simply stands in the middle and collects a fee with no risk. The beauty is that PWCC holds the assets, so the only risk to the hedge fund is that the price falls below the haircut value.

And yet everyone talking about this seems to agree PWCC had huge debt and was taken out by Fanatics at a token price. What else could account for that debt if PWCC had no risk in thesa nonperforming loans?

[Oscar_Stanage]

Originally Posted by conor912

I’d be really surprised if it was close to 60%. Hell, once the dust settles on an AH consignment, a seller is generally lucky to see 2/3 of FMV.

Maybe so. But in this case it’s PWCC selling through their own channel so not sure they wouldn’t just sell the card with no vig. I don’t know much about the details other than what is on the internet, but I do know that lenders barely take any risk outside of a disaster scenario so I think my originally description is close to accurate/.

Looking at the timeline, my guess is that PWCC’s revenue dropped substantially once they left the EBay platform in 2021. The lending business came a year later and was likely a creative attempt to generate revenue and save the business (as they still had the vault) the market didn’t cooperate - No one was flipping cards anymore, which would have been only people demanding loans. It was actually a brilliant idea, but the market dried up.

[Oscar_Stanage]

Originally Posted by Peter_Spaeth

And yet everyone talking about this seems to agree PWCC had huge debt and was taken out by Fanatics at a token price. What else could account for that debt if PWCC had no risk in thesa nonperforming loans?

See my next comment below. Post eBay I am guessing the revenue dried up and they were on their way out of business. That’s good enough for a token price.
Not sure I get why there would be a huge debt ? Why would loans be non performing with a huge haircut? If you read the public articles, there is a hedge fund financing all this . They are asset based lenders , they lend against collateral- machines , cars, paintings , baseball cards. they don’t take risk, its all about the haircut

[Peter_Spaeth]

Originally Posted by Oscar_Stanage

See my next comment below. Post eBay I am guessing the revenue dried up and they were on their way out of business. That’s good enough for a token price.
Not sure I get why there would be a huge debt ? Why would loans be non performing with a huge haircut? If you read the public articles, there is a hedge fund financing all this . They are asset based lenders , they lend against collateral- machines , cars, paintings , baseball cards. they don’t take risk, its all about the haircut

That's why I am thinking a rational hedge fund did not make these loans, Brent did or at least took on some significant risk and did not do proper valuations. We need to find someone who borrowed and see what the arrangement was.

[G1911]

Originally Posted by Peter_Spaeth

That's why I am thinking a rational hedge fund did not make these loans, Brent did or at least took on some significant risk and did not do proper valuations. We need to find someone who borrowed and see what the arrangement was.

Perhaps they valued the cards for what they sold at when PWCC was shilling to reach a fake end result, not what they could honestly sell them for when they needed to do so.

[MikeGarcia]

[Exhibitman]

Lots of the biggest modern cards fell like stones last year, whether it was the end of a frenzy, steroids, injuries or just poor performance. The 1986 Fleer MJ RC PSA 10 was a $700K card for a minute 2+ years ago and has settled back down to a pre-pandemic sub $200K range. If you loan 50% on a card and the card drops 70%+, you are at a loss, especially if you use either recourse financing or entered into specific debt covenants to get the cash to lend out, if your lending decisions were injudicious, and if you offered non-recourse loans to the card owners. My guess is that some combo of those factors was in play. PWCC may not have been insolvent but it could easily have run afoul of loan covenants that would allow the lenders to take control and force a sale. Maybe don't get greedy and stay in your lane, and definitely don't bet your company on a fickle market.



PWCC wouldn't be the first lender to get killed by collateral declining in value. Look at the commercial real estate market. Many banks are playing 'pretend and extend' for zombie commercial real estate loans right now; they know the values of their collateral have tanked. Office building owners in SF and NY and other major cities where remote working has taken root are handing keys to lenders and walking away from hundreds of millions in investments. I'm involved with one such scenario right now where my clients are waiting to see if the borrower defaults in October when the next installment payment comes due.

[Oscar_Stanage]

Makes sense. I read more about this - geez I did not realize modern fell THAT much. And I understand some borrowers just walked away from the loan and cards lol. Seems like really low quality clientele. Curious if that’s considered defaulting from a personal credit standpoint

Originally Posted by Exhibitman

Lots of the biggest modern cards fell like stones last year, whether it was the end of a frenzy, steroids, injuries or just poor performance. The 1986 Fleer MJ RC PSA 10 was a $700K card for a minute 2+ years ago and has settled back down to a pre-pandemic sub $200K range. If you loan 50% on a card and the card drops 70%+, you are at a loss, especially if you use either recourse financing or entered into specific debt covenants to get the cash to lend out, if your lending decisions were injudicious, and if you offered non-recourse loans to the card owners. My guess is that some combo of those factors was in play. PWCC may not have been insolvent but it could easily have run afoul of loan covenants that would allow the lenders to take control and force a sale. Maybe don't get greedy and stay in your lane, and definitely don't bet your company on a fickle market.



PWCC wouldn't be the first lender to get killed by collateral declining in value. Look at the commercial real estate market. Many banks are playing 'pretend and extend' for zombie commercial real estate loans right now; they know the values of their collateral have tanked. Office building owners in SF and NY and other major cities where remote working has taken root are handing keys to lenders and walking away from hundreds of millions in investments. I'm involved with one such scenario right now where my clients are waiting to see if the borrower defaults in October when the next installment payment comes due.

[BeanTown]

Let’s not forget Charles Keating and the Lincoln Savings and Loan scheme. Their assets included old surplus of military equipment from the 60s and 70s. I lost half my early child hood savings with that scumbag.

[Peter_Spaeth]

I still can’t quite get over how far and fast he fell. Not quite tSam Bankman – Fried, but up there.

[Casey2296]

Originally Posted by Peter_Spaeth

I still can’t quite get over how far and fast he fell. Not quite tSam Bankman – Fried, but up there.

Hubris Peter, lots of folks in business confuse making decisions based on their ego Instead of sound business practice, slippery slope indeed and the more you decide for your ego and less for practical business the harder the consequences. Plus he's shown he lacks moral character by throwing his wife to the wolves at the National while hiding in the corner.

[Peter_Spaeth]

I would say the card doctors, he knowingly dealt with, for decades are more indicative of his character then the single show with Betsy. He had a lot of things going for him, and in fairness was something of a visionary, but, as you say, his hubris, and in my opinion, lack of a moral compass, ultimately did not serve him well in the hobby.

[glchen]

I still remember meeting Brent to pick up my winnings when PWCC was still just a couple of small offices in Oakland. He should have just cleaned up the shilling and bad behavior and stuck w/ ebay. Here is one card that I won from PWCC a few years ago.

[BeanTown]

Originally Posted by glchen

I still remember meeting Brent to pick up my winnings when PWCC was still just a couple of small offices in Oakland. He should have just cleaned up the shilling and bad behavior and stuck w/ ebay. Here is one card that I won from PWCC a few years ago.

Nice card and one saying comes to mind with Brent. Pigs get fat and Hoggs get slaughtered.

[Exhibitman]

Well, there's no trimming on that one, Gary. Also, a very nice and very underappreciated Ruth card. Tough set. Another one:

[steve B]

Originally Posted by Lorewalker

Mutual and no other details? Oh ok. I would say it was anything but amicable but I could be wrong.

Mutual and Amicable don't have to go together.

Like
___ You!
Yeah, well ___ you too!

Mutual but hardly amicable.

Or
You didn't do this right!
Well it is working properly, but every shop has a slightly different way of doing things. Maybe our methods just aren't a good fit for you? There's another shop just up the road that you could try that might be a better fit.
Oh, Ok then, I'll go there.

Amicable, but not exactly Mutual. (He was a jerk, I sent him to our competition, who was sloppy and charged at least 3x as much.) And he was happy enough about it to recommend us?! And came back about 6 months later with a much better outlook on things. )

[Lorewalker]

Originally Posted by steve B

Mutual and Amicable don't have to go together.

That was my point or at least the point I was trying to make.

[Peter_Spaeth]

It's typical for an organization to soft-pedal the termination of an executive. I place no stock in what Fanatics said about it.

[Peter_Spaeth]

How soon until Fanatics rebrands the business?

[Casey2296]

Originally Posted by Peter_Spaeth

How soon until Fanatics rebrands the business?

<6 months
The name is a liability not an asset.

[Peter_Spaeth]

Originally Posted by Casey2296

<6 months
The name is a liability not an asset.

I think within a month, if not tomorrow.

[Peter_Spaeth]

And how long until Brent resurfaces in the hobby?

[raulus]

Originally Posted by Peter_Spaeth

I think within a month, if not tomorrow.

Any hot takes on potential new names? Do they sort of include a bit of the prewar name in the new entity name? Or just something completely unrelated?

[Lorewalker]

Originally Posted by Peter_Spaeth

And how long until Brent resurfaces in the hobby?

That depends on how long it takes for him to get over turning down 350 million and then getting booted out of his own business. I cannot see Brent working for anyone after building PWCC. If someone can set aside the fact that he is as unethical as they come, his creativity, work ethic and ingenious ideas (assuming they were his) would be an asset to many companies but what a liability.

Would have to be that company who does not disclose who their key employees are.

[G1911]

Originally Posted by Lorewalker

That depends on how long it takes for him to get over turning down 350 million and then getting booted out of his own business. .

Well we know this can’t be so, Brett’s fanboys have informed us he couldn’t possibly lose because he’s Brett. He always comes out on top no matter what.

[Lorewalker]

Originally Posted by G1911

Well we know this can’t be so, Brett’s fanboys have informed us he couldn’t possibly lose because he’s Brett. He always comes out on top no matter what.

Net54 is full of many geniuses, Greg. 8 months ago I got a 2nd on my house, liquidated my retirement accounts and bought cards with the proceeds. I got the advice from a few guys here.

[Lorewalker]

I assume the Brian B who this member is posting about is the former FBI agent?

https://www.blowoutforums.com/showpo...postcount=8077

If so that is certainly a twist. Lemme see how this works...the agent who was conducting a multi year long investigation into PWCC leaves the bureau and ends up working at/for PWCC? And this info gets leaked now, a few days after we hear that Brent left PWCC?

I am refraining from commenting until I make sure the Brian B he refers to is the former FBI agent.

[Peter_Spaeth]

Originally Posted by Lorewalker

I assume the Brian B who this member is posting about is the former FBI agent?

https://www.blowoutforums.com/showpo...postcount=8077

If so that is certainly a twist. Lemme see how this works...the agent who was conducting a multi year long investigation into PWCC leaves the bureau and ends up working at/for PWCC? And this info gets leaked now, a few days after we hear that Brent left PWCC?

I am refraining from commenting until I make sure the Brian B he refers to is the former FBI agent.

It would be even more ironic if Brent had stayed at Fanatics. Former target of your criminal investigation now your coworker.

[Lorewalker]

Originally Posted by Peter_Spaeth

It would be even more ironic if Brent had stayed at Fanatics. Former target of your criminal investigation now your coworker.

The entire thing is just...uncomfortable. Hey this is a great hobby but you must keep your eyes trained just on your cards.

[Leon]

Originally Posted by Lorewalker

The entire thing is just...uncomfortable. Hey this is a great hobby but you must keep your eyes trained just on your cards.

I am happy to report the FBI is still knee-deep in the hobby. I spoke with 3 Special Agents that are here and they seem highly interested in the hobby. I wish there were 50 of them investigating (no, that doesn't make sense, just sayin').
.
.

[Lorewalker]

Originally Posted by Leon

I am happy to report the FBI is still knee-deep in the hobby. I spoke with 3 Special Agents that are here and they seem highly interested in the hobby. I wish there were 50 of them investigating (no, that doesn't make sense, just sayin').
.
.

That is great to hear, Leon. Not sure what this means n terms of the big picture but great to know they are interested in the industry. Did they hand out any "invitations" that you know of?

[Leon]

Originally Posted by Lorewalker

That is great to hear, Leon. Not sure what this means n terms of the big picture but great to know they are interested in the industry. Did they hand out any "invitations" that you know of?

They are still investigating old and new cases as far as I know. I don't know what they did, or didn't do, so don't know if any invitations LOL were given out. I am just happy they are still here.
.

[Peter_Spaeth]

Originally Posted by Leon

They are still investigating old and new cases as far as I know. I don't know what they did, or didn't do, so don't know if any invitations LOL were given out. I am just happy they are still here.
.

I am sure the card doctors of the world are real nervous.

[Pat R]

Originally Posted by Peter_Spaeth

I am sure the card doctors of the world are real nervous.

Right Peter. They have names and solid evidence on the 15-20+ T206's with the fake auto's and going on 6 years later has anything been done?

The only changes I've seen is disappearing scans and ebay making it near impossible to track shady sellers/buyers.

[Peter_Spaeth]

https://sportscollectorsdigest.com/n...-cicotte-fraud

Pat is this something different?

[Pat R]

Originally Posted by Peter_Spaeth

https://sportscollectorsdigest.com/n...-cicotte-fraud

Pat is this something different?

That's the ones thanks Peter and my apologies for bringing it up I don't remember hearing about the charges.

[Peter_Spaeth]

At this point I don't think we'll see any comparable action against all the outed card doctors and enablers.

[Lorewalker]

Originally Posted by Peter_Spaeth

At this point I don't think we'll see any comparable action against all the outed card doctors and enablers.

Clearly proving card altering in court has a different set of standards than on the internet. It cannot help that there are so many altered cards in holders and few care that there are.

[Leon]

Originally Posted by Lorewalker

Clearly proving card altering in court has a different set of standards than on the internet. It cannot help that there are so many altered cards in holders and few care that there are.

+1000....
Quite honestly I don't think it makes them want to go after someone if the buyers and sellers don't care. Whose the victim? You could say people down the line. But they don't care either.
The flip can't be wrong. Buy the holder!
.

[Peter_Spaeth]

As futile as going after John Barleycorn.

[Leon]

Originally Posted by Peter_Spaeth

As futile as going after John Barleycorn.

That is folklore, this is fraud, but I get your point.
.

[Peter_Spaeth]

Originally Posted by Leon

That is folklore, this is fraud, but I get your point.
.

They won, man. Just like in the song. Little Sir Dave (or whoever, so many interchangeable names here) with his file and blade proved the strongest man at last.

Guys like you and me, who grew up in the hobby in a time with the mindset that altering cards was unacceptable, we're relics.

[Lorewalker]

Originally Posted by Leon

+1000....
Quite honestly I don't think it makes them want to go after someone if the buyers and sellers don't care. Whose the victim? You could say people down the line. But they don't care either.
The flip can't be wrong. Buy the holder!
.

Exactly, Leon. The people who do care are in the minority and that number gets smaller each day. Regardless of the reason, during the entire investigation of PWCC, prices increased and business increased with third party graders. Might be ethically wrong to mess with a sports card but apparently the message from the hobby, in general, is that it is not an issue.

[Aquarian Sports Cards]

Originally Posted by Leon

I am just happy they are still here.
.

Amen

[Republicaninmass]

Even a resident ding dong who got burned on a trimmed card, went back to the well and came back crying it happened again. People.will care, some won't, UT eventually it may drive new money from the hobby. Us old dinosaurs won't be around forever, and there needs to be new hobbyist who care about thr cards, just not the dollar figure attached to their portfolio.