David Hall Out at Collector's Universe - somewhat old news

[Zebo]

I've been away a bit, but just heard that David Hall is out at Collector's Universe along with a couple others. see below:

David Hall Termination Press Release

Hall’s departure is the latest in a string of high profile personnel changes at Collectors Universe. Earlier this year, the company saw PCGS Vice President Mark Stephenson, PCGS CoinFacts President Ron Guth, and PCGS founder John Dannreuther leave.

2018 has been a difficult year for the Newport Beach grading service. In February, Collectors Universe stock lost more than 30% of its value after dividends were cut from $0.35 per share to $0.175 per share.

The company’s most recent quarterly report, showed a 4.6% decline of revenue over last year, with the coin division accounting for most of the decline. The company’s revenues were buttressed this year by an 18% increase in revenue from its sports card and autograph divisions.

The weak coin numbers are reflective of the weakness of the current market, which in recent years has suffered headwinds, especially in its modern divisions. Despite these numbers, the overall financial picture of Collectors Universe’s appears to be solid.

As news circulated around the numismatic hobby, dealers and industry insiders expressed a sense of shock.

Hall has been a very public face for the PCGS and Collectors Universe brand and its hard to imagine the company without him.

For years, Hall’s Rare Coin Market Report videos were a staple on the company’s YouTube channel and he would often meet with collectors and fans, holding “Meet the Expert” sessions at the Long Beach Expo.

CoinWeek reached out to David Hall and found him to be in good spirits, despite the news. “The Collectors Universe press release is correct,” Hall said, “And I expect PCGS to continue to do the great job that it has done over the years.”

An explanation as to what happened at the company to necessitate the termination was not forthcoming from Hall or from Collectors Universe CFO Joe Wallace, who told CoinWeek that Collectors Universe is grateful for the “immense contribution made by David Hall over the course of his career,” but as Hall’s termination is a personnel matter, Wallace said, “we cannot further.”

[World Colonial]

Yes, read that on the PCGS forum though don't post there.

Seems to me that stagnation is inevitable in the slabbing business.  Roger's post in another thread states it accurately.  There are only so many coins of sufficient value worth grading.  Seems to me that volume and revenue must be kept afloat by NCLT where the submitter is hoping to get a "70".

Both NGC and PCGS keep raising their fees where it isn't economical to submit as many coins as in the past.  I used to buy and submit many more lower priced coins because I could sell them later and recoup most, all or more of my cost.  This even if not bought for "flipping".  I have changed my focus in the last five years but even if I hadn't, still wouldn't buy and submit as many lower priced coins as I did in the past.  I now buy fewer more expensive coins and just leave many or most of the cheaper ones I buy "raw".

I haven't submitted anything in over a year but I read over there that NGC also raised it's fees for world economy to $21.  Add postage and insurance and it's too much for any coin worth less than a few hundred.  The limit for world economy remains $300 to my knowledge and should be raised, as it hasn't changed since at least 2005 when the fee was $15 with a 10% discount for Collector's Society membership.

I know that TPG costs have gone up but a flat or declining market with a roughly 50% fee increase (depending upon tier and service) is bound to lead to fewer submissions, stagnant revenue or both.

[numisport]

Writing was on the wall and I still think its a problem that they have a 'board of experts' that are mainly PCGS ONLY dealers. While probably not related to Mr. Halls routing it just doesn't look good to me. Of course that doesn't stop me from obtaining eye appealing coins at lowest market prices in years. Its a good time to buy IMO for properly graded NGC and PCGS coins with great (and this is the key) GREAT EYE APPEAL !

[thebeav]

I don't think that this is necessarily bad for coins, just bad for grading company's.

 

[Six Mile Rick]

I do think that the volume of the sets today are the problem. A modern proof set was only 5 coins before 1999 ( 8 with the silver coins). Now with the amount of dollars and quarters in the set the grading cost per set is getting close to $500 a set for silver and clad. Add the new reverse proofs we need every year and how do they expect a dealer to afford a 20 set flip for grading??  That is what I think killed the modern end of grading profits.

[World Colonial]

16 hours ago, Six Mile Rick said:

I do think that the volume of the sets today are the problem. A modern proof set was only 5 coins before 1999 ( 8 with the silver coins). Now with the amount of dollars and quarters in the set the grading cost per set is getting close to $500 a set for silver and clad. Add the new reverse proofs we need every year and how do they expect a dealer to afford a 20 set flip for grading??  That is what I think killed the modern end of grading profits.

It's more than your example.

Most of the incremental submission volume in the recent past is or appears to be NCLT, both US and world.  Presumably much of this volume is at bulk discounts.

Collectors and financial buyers appear to be buying NCLT as a replacement for the most widely collected US classic coinage which previously represented the majority of the submission volume.  I don't know that this is the only reason for the decline in the US price level (I believe one of many) but it can't help.

Declining prices for many or most US classics and the lower price level for most world coinage doesn't make submission worthwhile, especially with the fee increases in the last 10+ years.

It's also become more expensive to sell coins.  Ebay used to be a much better outlet for selling lower priced coins but the fee increases and weak market make it less viable.  I don't know that this has impacted submission volume either but it can't help.

There is a limit to growth from resubmissions.  Since this has absolutely nothing to do with collecting and everything to do with financial buying, at some point it won't be worthwhile for either existing collectors selling their collections or speculators.

Submission volume for US circulating moderns isn't going to present much of a growth opportunity either.  Most of these coins sell for less than the grading fee and are far too common where any future appreciation will change the economic proposition.

Outside of NCLT, I see zero possibility that submission volume for world coinage, whether by US collectors or elsewhere, will ultimately compensate for declining US classic volume.  I am aware that NGC and PCGS have opened a few locations elsewhere, such as in Paris and Hong Kong.  Aside from the lower price level which makes it a poor economic proposition for most of this coinage:

One:  Most collectors outside the US do not like TPG.

Two:  More importantly, world "classics" do not remotely exist in sufficient supply in a quality where it will make any sense to pay to have it graded.  I don't believe the TPG's ever really considered this limitation. 

There may be a few countries such as the UK and Canada where the proportional supply might be comparable in a few instances, but not absolutely.  As an example, the supply of Morgan and Peace dollars in "high" quality is greater than all other silver crowns combined and probably by a substantial margin.  This might also be true of pre-1933 generic gold.

[WoodenJefferson]

...these actions remind of George Zimmer and Men's Warehouse

[Tyrock]

I imagine it's only a matter of time before the change to a 100 point grading scale. That will increase submissions for the grading services. 

[MarkFeld]

2 hours ago, Tyrock said:

I imagine it's only a matter of time before the change to a 100 point grading scale. That will increase submissions for the grading services. 

Don Willis recently stated otherwise in a post on the C.U. forum.

[Conder101]

Don Willis won't be there forever either.

[World Colonial]

On ‎9‎/‎30‎/‎2018 at 9:01 AM, Tyrock said:

I imagine it's only a matter of time before the change to a 100 point grading scale. That will increase submissions for the grading services. 

If it is even attempted, it will have a substantial negative impact on the price level of any coin with a "material" value which is dependent upon the TPG grade.  And no, I don't believe most collectors will resubmit their coins and waste the money for regrading either.

[dragon]

 As if it wasn't bad enough pcgs has changed their grading 'standards' at the drop of a hat over the years,  has what I'd consider possibly the most incompetent and ineffective customer service dept I've ever dealt with (whoever heads that dept should have been terminated years ago IMO), and has essentially served no real purpose to either the industry nor the hobby over the past decade.........with the departure of David Hall, pcgs is now just a generic non-entity going forward IMO, and I'd be mildly surprised if they are even an ongoing concern in the coming years.

[coinman_23885]

Maybe Hall should create another grading service to compete with PCGS.