Blackstone acquires a majority stake in Certified Collectibles Group 1 1

[MarkFeld]

https://www.businesswire.com/news/home/20210701005601/en/Blackstone-Tactical-Opportunities-to-Acquire-the-Certified-Collectibles-Group-a-Leading-Provider-of-Tech-Enabled-Authentication-Grading-and-Conservation-Services-for-the-Global-Collectibles-Industry

[comicdonna]

It appears that the only thing that will change is, the majority of the profits will go to someone else.  Otherwise, it's business as usual.  

[Fenntucky Mike]

It seems like a good time to sell, plus you still get to keep a piece of the company.  

[MarkFeld]

23 minutes ago, comicdonna said:

It appears that the only thing that will change is, the majority of the profits will go to someone else.  Otherwise, it's business as usual.  

It seems a bit early to reach that or any other conclusion.

[Morpheus1967]

17 minutes ago, MarkFeld said:

It seems a bit early to reach that or any other conclusion.

Seems more like an opinion than a conclusion.  

Edited July 1, 2021 by Morpheus1967

[Alex in PA.]

Meet the new boss same as the old boss.........

[RWB]

It's the same piece of the specialty market that created the PCGS purchase. Likely less resources devoted to coins.

[VKurtB]

55 minutes ago, RWB said:

It's the same piece of the specialty market that created the PCGS purchase. Likely less resources devoted to coins.

I see that as a distinct possibility. 

[Coinbuf]

2 hours ago, VKurtB said:

I see that as a distinct possibility. 

I hope not, however coins are a more mature sector where other collectables like comics and cards are hot now.  I do not know if this will be good or not, time will tell what and where the priorities lay for the new ownership.

[Henri Charriere]

5 hours ago, Alex in PA. said:

Meet the new boss same as the old boss.........

[I am not going to speculate as to why you said that but as far as I am concerned the name Blackstone is tainted beyond redemption and a new name should have been chosen.]

[EdG_Ohio]

Looks my last year for membership, I'll submit a few coins to burn my "credit" but I believe that will be the last of it. When people buy into something just for profit it doesn't end well for the end user. I can speak from recent experience as a 100+ year old American firm IH(International Harvester aka Navistar Truck & Engine) just completed a merger deal that makes VW/Traton the owner and my contract is up 2023 and I've been in enough meetings to know the writing is on the wall.
Some of the new owners are listed in the article. Didn't realize jay-z was a coin collector, I'm sure he'll be a great asset to the collector out there.
https://www.msn.com/en-us/money/companies/jay-zs-roc-nation-joins-blackstone-in-takeover-of-24500-million-collectibles-company/ar-AALHG7D

Edited July 4, 2021 by EdG_Ohio

[Revenant]

3 hours ago, EdG_Ohio said:

https://www.msn.com/en-us/money/companies/jay-zs-roc-nation-joins-blackstone-in-takeover-of-24500-million-collectibles-company/ar-AALHG7D

"Blackstone seeks to develop CCG's digital presence, add employees, and branch CCG's geographic reach."

That "digital presence" sounds like that could get the new Registry for NGC finished - with Custom sets again - and get a new PMG registry up and out there and maybe more.

I'm not sure how I feel about this yet.

My own small employer was bought 80% by a larger company that has subsequently been sold/ remerged with another group. At my level it has made little difference and we carry on. I hope that will be the case here - they get resources but get left alone.

[GoldFinger1969]

I don't see how this moves the needle for BX.  FWIW, I'd be a buyer of the stock but at a lower price. 

[GoldFinger1969]

2 hours ago, Revenant said:

My own small employer was bought 80% by a larger company that has subsequently been sold/ remerged with another group. At my level it has made little difference and we carry on. I hope that will be the case here - they get resources but get left alone.

That's rarely the case.  I wish NGC well and I think with their people staying the company won't be the worse for it.  Maybe BX has some domestic or global contacts that can open up new business lines for CCG affiliates.

I wonder how much of this was a need for a more liquid currency (BX stock) for CCG higher-ups and BX's wide moat globally helps expand their business lines (though I'm not sure how).  I know lots of foreign countries could use standardized certifications and authentication services, but it's not their most pressing needs (financial stability, property rights, etc. all higher-up for most countries).

Edited July 4, 2021 by GoldFinger1969

[Woods020]

Well regardless of how you view this, what I think a key takeaway is that it is a good signal for the hobby’s longevity. I know the due diligence investment firms put into M&A, and they surely analyzed the market projections for the future to the nth degree. Regardless of how they run the business my takeaway is that some very intelligent people analyzed the collectibles market and felt it would remain strong to growing. That’s a good thing.

[GoldFinger1969]

32 minutes ago, Woods020 said:

Well regardless of how you view this, what I think a key takeaway is that it is a good signal for the hobby’s longevity. I know the due diligence investment firms put into M&A, and they surely analyzed the market projections for the future to the nth degree. Regardless of how they run the business my takeaway is that some very intelligent people analyzed the collectibles market and felt it would remain strong to growing. That’s a good thing.

Maybe....OTOH, they have so much unused capital that they could write this off 100% and it barely makes a dent in their bottom line.  I think the purchase of CU/PCGS by the 2 parties (including NY Mets owner Steve Cohen) shows more skin in the game, FWIW.  As we saw in another thread, General Mills got into coins and numismatics with Bowers/Ruddy and that was a nothingburger even with the spectaular growth of the 1970's at their back.

Grading and certifying -- not necesarily of coins -- could be a secular growth story for Gen Z and Millenials plus aging Baby Boomers.  As a publicly-traded company, BX will make disclosures on this going forward.

Remember, even if only 1% more of the adult population gets into coins that's hundreds of thousands of serious collectors. 

[World Colonial]

12 hours ago, GoldFinger1969 said:

I wonder how much of this was a need for a more liquid currency (BX stock) for CCG higher-ups 

I can see this for both CCG and CU.

12 hours ago, GoldFinger1969 said:

BX's wide moat globally helps expand their business lines (though I'm not sure how).  

I can see this as part of the strategy too but predominantly outside of coins.

12 hours ago, GoldFinger1969 said:

I know lots of foreign countries could use standardized certifications and authentication services, but it's not their most pressing needs (financial stability, property rights, etc. all higher-up for most countries).

Well, actually they do not.  TPG is a necessity for financialization of any mass produced hobby segment but has very little to do with actual collecting.  Even with counterfeits, this is predominantly a problem due to the inflated price level caused by financialization. 

Prior to TPG, the price spreads between grades for most world coins weren't financially meaningful and still aren't now.  While US collectors will pay meaningful spreads for one point increments on the Sheldon scale, collectors elsewhere mostly don't and will not.  It's my inference (an obvious one) that most of the increase in price spreads between grades is caused by US collectors, not anyone else.

US coinage had problems with counterfeiting pre-financialization (before the 70's) but that's because the price level was always an outlier versus other markets and it was profitable to counterfeit common but still (relatively) expensive coins, such as 20th century US key dates.

Outside of US coinage, it's an increasing problem but once again, t's only worthwhile to counterfeit anything if being a counterfeiter produces an acceptable ROI or you can make a living at it.  Most world coins aren't worth the bother of counterfeiting, due to the low price and also being too scarce.

[GoldFinger1969]

Appears there could be tens of millions of sports cards (mostly baseball) that people want graded and there simply aren't enough graders to handle things.  Backlog is 1 year and growing and they're not even taking new submissions:

https://www.espn.com/mlb/story/_/id/31244566/hobby-searches-answers-psa-grading-services-halts-card-submissions

[World Colonial]

On 7/24/2021 at 10:11 PM, GoldFinger1969 said:

Appears there could be tens of millions of sports cards (mostly baseball) that people want graded and there simply aren't enough graders to handle things.  Backlog is 1 year and growing and they're not even taking new submissions:

https://www.espn.com/mlb/story/_/id/31244566/hobby-searches-answers-psa-grading-services-halts-card-submissions

It's the equivalent of the public emptying out their change jars and sending most or all of it to the TPGs.

I have a friend who handed her deceased husband's stash to hold for her.  I have no idea what is in it as I have not looked and would need to research value.  She needs the money but I would have to front her the submission fees, as she hardly has two nickels to rub together.

I wasn't aware the backlog was this large.  By the time everything in the queue gets graded, it's possible the bubble will have burst.  It's going to burst one way or the other because most if not practically all of this stuff is very common and a lot more common than currently evident.  Already 316 GEM-10 Jordan rookie cards selling in the high six figures is common as dirt for a collectible in this price range.  Almost certainly many more out there too.

[GoldFinger1969]

On 7/25/2021 at 4:04 PM, World Colonial said:

I wasn't aware the backlog was this large.  By the time everything in the queue gets graded, it's possible the bubble will have burst.  It's going to burst one way or the other because most if not practically all of this stuff is very common and a lot more common than currently evident.  Already 316 GEM-10 Jordan rookie cards selling in the high six figures is common as dirt for a collectible in this price range.  Almost certainly many more out there too.

The supply of top-ranked cards will increase, lessening the premium they command compared to raw ungradeds or existing low-gradeds.

I wonder why they don't use AI, lasers, hi-def scanners, etc. to grade many of these cards.  It should be easy to check for sharp corners and make sure dimensions are correct (no trimming) compared to the naked eye.  Many of these cards are worth under $100 and certainly $500 -- no need for human eyes to look them over except in special circumstances.

I have a few dozen cards worth grading but I guess I'll be sending them in about 2025 or so....

[gmarguli]

Replace card with coin and this played out many years ago. 

Given what they're charging to grade a card, there must be a ton of profit in the business, which can only lead to a crash in prices. Think PR70 coins drop in value.

Edited July 26, 2021 by gmarguli

[GoldFinger1969]

On 7/26/2021 at 11:51 AM, gmarguli said:

Replace card with coin and this played out many years ago. 

Did it ?  As of this month, both PCGS and NGC have graded over 30 million coins in the U.S.  Not sure how  long cards have been graded (a few years ?) but whatever the graded total is already you can add 10 MM (or more) that could be graded tomorrow and the backlog appears to dwarf anything at the TPGs had int he past, even in the 1980's (upon commencing of operations) or 1990's (post-bubble).

On 7/26/2021 at 11:51 AM, gmarguli said:

Given what they're charging to grade a card, there must be a ton of profit in the business, which can only lead to a crash in prices. Think PR70 coins drop in value.

Which coins specifically crashed ?  It may take a while for the supply to catch up with demand before prices fall.  We saw it with the 1990's Crash as card supply went from 250 MM to 1.2 billion.

[gmarguli]

On 7/26/2021 at 9:55 PM, GoldFinger1969 said:

Did it ?  As of this month, both PCGS and NGC have graded over 30 million coins in the U.S.  Not sure how  long cards have been graded (a few years ?) but whatever the graded total is already you can add 10 MM (or more) that could be graded tomorrow and the backlog appears to dwarf anything at the TPGs had int he past, even in the 1980's (upon commencing of operations) or 1990's (post-bubble).

Which coins specifically crashed ?  It may take a while for the supply to catch up with demand before prices fall.  We saw it with the 1990's Crash as card supply went from 250 MM to 1.2 billion.

Listen to the talk about graded cards and it is a repeat of what was happening in coins 30 years ago. Same BS about a single grade point inflating the value. 

People are talking about super high grade cards, I guess that is a 10 on the scale they currently use. Common junk, but super high grade. Hum, where did I see this before? Oh yeah, modern coins. MANY PR70s are selling for 1%-2% of their highs 20 years ago. 

[VKurtB]

On 7/27/2021 at 12:29 PM, gmarguli said:

Oh yeah, modern coins. MANY PR70s are selling for 1%-2% of their highs 20 years ago. 

ABSOLUTELY. How could they not? Many modern issues now feature a MAJORITY of the pieces getting 70’s. Why don’t people understand this?

[MarkFeld]

On 7/27/2021 at 12:29 PM, gmarguli said:

Listen to the talk about graded cards and it is a repeat of what was happening in coins 30 years ago. Same BS about a single grade point inflating the value. 

People are talking about super high grade cards, I guess that is a 10 on the scale they currently use. Common junk, but super high grade. Hum, where did I see this before? Oh yeah, modern coins. MANY PR70s are selling for 1%-2% of their highs 20 years ago. 

 1%-2%? I've seen some dramatic drops in value, but don't recall any that approached those levels. 

[gmarguli]

On 7/27/2021 at 12:21 PM, MarkFeld said:

 1%-2%? I've seen some dramatic drops in value, but don't recall any that approached those levels. 

For PR70 moderns, many have. You can pull the sale prices from the PCGS site. 

I pulled these randomly:

1989 1c - $1380 vs $70. 5%

1976 5c - $4230 vs $144. 3.4%

1999 10c - $1438 vs $23. 1.6%

1991 25c - $558 vs $20. 3.6%

1992 Silver 50c - $1895 vs $45. 2.4%

1972 Ike - $4715 - $240-$312. 5%

Admittedly, those are their high and low points, but there is no denying that the prices have been crushed.

[Conder101]

On 7/27/2021 at 12:55 AM, GoldFinger1969 said:

Not sure how  long cards have been graded (a few years ?)

About 30 years.  I believe the first card grading services appeared in the early 1990's.  I believe Beckett (BCG) was the first, Collectors Universe started PSA in 1991.  I'm not sure when SCG started.

Edited July 27, 2021 by Conder101

[VKurtB]

On 7/27/2021 at 4:22 PM, Conder101 said:

About 30 years.

30 years too long.

[RWB]

On 7/27/2021 at 5:10 PM, gmarguli said:

For PR70 moderns, many have. You can pull the sale prices from the PCGS site. 

I pulled these randomly:

1989 1c - $1380 vs $70. 5%

1976 5c - $4230 vs $144. 3.4%

1999 10c - $1438 vs $23. 1.6%

1991 25c - $558 vs $20. 3.6%

1992 Silver 50c - $1895 vs $45. 2.4%

1972 Ike - $4715 - $240-$312. 5%

Admittedly, those are their high and low points, but there is no denying that the prices have been crushed.

...but only "crushed" if one believed those absurd "prices" were actually values. Much the same occurred with phony "first stricken" and other bologna-worthy designations.

[MarkFeld]

On 7/27/2021 at 4:10 PM, gmarguli said:

For PR70 moderns, many have. You can pull the sale prices from the PCGS site. 

I pulled these randomly:

1989 1c - $1380 vs $70. 5%

1976 5c - $4230 vs $144. 3.4%

1999 10c - $1438 vs $23. 1.6%

1991 25c - $558 vs $20. 3.6%

1992 Silver 50c - $1895 vs $45. 2.4%

1972 Ike - $4715 - $240-$312. 5%

Admittedly, those are their high and low points, but there is no denying that the prices have been crushed.

Thank you!