Collectors (PSA) Acquired SGC

[Rhotchkiss]

Originally Posted by Peter_Spaeth

Long term, it wouldn't seem to make sense to acquire a competitor then just run it as a separate division competing with the main division.

It happens all the time.

Many car manufacturers produce and sell competing brands. Car rental companies own competing brands. Heck, REA just bought Huggins. It makes no sense to buy a company only to shut it down. My gut is there are synergies/efficiencies they can realize operating both companies, reducing expenses and maximizing production and efficiency. It makes a ton of sense to acquire a competitor to run it as a separate division. It makes no sense to pay good money for a small, relatively non-competitor only to kill it/shut it down.

Peter, I respect your legal conclusions much more than your financial opinions!

[Peter_Spaeth]

Originally Posted by Rhotchkiss

It happens all the time.

Many car manufacturers produce and sell competing brands. Car rental companies own competing brands. Heck, REA just bought Huggins. It makes no sense to buy a company only to shut it down. My gut is there are synergies/efficiencies they can realize operating both companies, reducing expenses and maximizing production and efficiency. It makes a ton of sense to acquire a competitor to run it as a separate division. It makes no sense to pay good money for a small, relatively non-competitor only to kill it/shut it down.

Peter, I respect your legal conclusions much more than your financial opinions!

Ryan lol. I was thinking about merging it and integrating it, not shutting it down. A year from now we can look back and see which course they took.

[Rhotchkiss]

Originally Posted by Peter_Spaeth

Ryan lol. I was thinking about merging it and integrating it, not shutting it down. A year from now we can look back and see which course they took.

Agree! Time will tell. Right now we are just a bunch of talking heads who really know nothing.

All I am saying is that there is brand recognition with SGC and they have a following. If PSA eliminates them, then they pick up some of that following and they likely lose some of that following. If they keep SGC (mostly) as is, they retain likely 100% of the following and potentially create additional business for either PSA, SGC or both. This should be a 1+1 =3 situation.

Both companies are in the same business. Figure a way to streamline and merge processes, back office, overhead, etc. and increase the profits of both companies; and yes, maybe a little cornering of the market too.

Troy is a genius because he agreed with my earlier statement : "While I don’t love this, my gut is it will somehow all work in the end. It usually does. Nothing I can do about it and I will still be collecting cards, so it will be what it be."

[Lorewalker]

Originally Posted by Rhotchkiss

It happens all the time.

Many car manufacturers produce and sell competing brands. Car rental companies own competing brands. Heck, REA just bought Huggins. It makes no sense to buy a company only to shut it down. My gut is there are synergies/efficiencies they can realize operating both companies, reducing expenses and maximizing production and efficiency. It makes a ton of sense to acquire a competitor to run it as a separate division. It makes no sense to pay good money for a small, relatively non-competitor only to kill it/shut it down.

Peter, I respect your legal conclusions much more than your financial opinions!

I don't find the comparison of a grading company to a car company, or restaurant chains, to be analogous. The grading companies in particular have very different approaches to business. Also think card grading is not a diverse enough industry that it would make sense to have 2 brands under 1 parent.