When money is cheap (low interest rates), and easy to get (low collateral, high asset valuations), debt is very attractive. If you think you can borrow in the single digits and get a return from your business in the double digits then it makes good business sense, as long as you can meet the debt covenants. The concept for Wanda would be to use debt to expand the brand (add more races, publicity, create some superstars, etc.) to bring in more revenue (sales). These are all forms of leverage and that’s how real money is made nowadays (use other people’s money, use the IM brand in anything that will pay royalties on it, have suppliers and cities fund your events, get participants to pay a lot a year in advance and use that money, etc.). If it turns out Wanda wants to sell then it all depends on what someone else is willing to pay, they could make money or eat the loss (again the structure of the debt agreements plays a big role as selling a secured asset at a book value loss would surely trigger an immediate repayment). The problem with debt is when you can’t pay it back! Wanda would be in trouble if revenues dropped significantly and had to sell, say there’s a recession and people stopped or greatly reduced triathlon participation, or there’s some big scandal that causes people or communities to shun IM. I don’t think participation dropped that much in 2009, and can’t think of a scandal issue, so Wanda’s foreseeable revenues look safe. The question is will they grow and will Wanda make more money, or will they sell pay off the debt and/or buy something that gives a better return for the investment. Again, this isn’t an issue where Wanda wants to sell, this topic came up because someone wants to buy... big, big difference.

Again, this isn’t an issue where Wanda wants to sell, this topic came up because someone wants to buy... big, big difference.


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True, and as I earlier stated, I'm trying to figure out PTU's angle? What idea are they sitting on to revolutionize pro prize purses? Is it advertising on these FB live races? Is it taking larger % from the AG athletes?


Is IM the only brand that they can do? IE- Has Super League pretty much covered the ITU short course style so they don't want to compete and so the next thing is IM racing again?


I actually think the best value of racing + professionalism is at the 70.3 distance (outside of 1-2 hour ITU events/ Super League). I just dont think IM is deep enough for it to be a "race" + it's a damn 8-9 hour event; that's hard on any viewer. (I pretty much check out once they get to about 5km into the run and then check back in 90 mins later around mile 18-20)

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Brooks Doughtie, M.S.
Exercise Physiology
-USAT Level II

Curious what your source is for this.

But PTO, a non-profit that has never done anything doesn't have the money. The point here is that they'd still be beholden to both a bank and investors. Even Angel Investors still want to cash out.

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Washed up footy player turned Triathlete.

Curious what your source is for this.//

Just have been paying attention since there was an ironman. Most of this stuff is in business articles, a lot of it Dan has written about over the years too. Some of it is just talked about quietly among insiders. Of course since it has been 40 years, my memory gets fuzzy on some details, but the broad strokes I'm pretty confident in.. Do you have some information you would like to share?


That's one of the good things about Wanda choosing to go public, all this hush hush stuff that we had to rely on before, is now supposed to be public, and according to certain accounting principals. I bet Wanda wishes it were that way before they looked at the books and paid that price they did. Lots of tricks to make something look a lot more valuable than it actually is..

i spent most of the day running this down, spoke to all the parties, multiple times, except for the investment bank. i wrote it up on the front page. most of what is true you guys have already said.

1. if the PTO has 2 nickels to rub together, it's news to me.
2. that doesn't means it's not true. the reason i elevate this from nothingburger to veggie patty is the presence in the middle of this of an investment bank. that said, the only party not to return my call or email is the guy listed as a contact at the bank on the press release. if you're going to send out a release on monday morning and then golf all day, or whatever, how seriously do you take this? that said, this kind of makes it real.
3. the PTO is buying nothing, that i can see. the investors are buying something, and the PTO is just getting the whole process in motion.
4. the PTO will need to convince the new owners what it failed to convince any of the previous owners. that doesn't mean they can't.

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Dan Empfield
aka Slowman

Monty's pretty much got it. Providence Equity had driven massive expansion of events and the 70.3 series in particular, so was tracking towards a good bit better result than the "no return" that Monty says. But, yes, investors had seen no liquidity event and the investment getting a bit long in the tooth by PE expectations. So, a $240M loan that goes straight to the pockets of impatient investors to tide them over while the hunt for a buyer gets underway.

https://www.bizjournals.com/...llion-debt-deal.html

Thank you for being the voice of reason/enlightenment on this thread.

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Editor-in-Chief, Slowtwitch.com | Twitter

Kelly’s and my take: this is a negotiating tactic to purchase some unknown percentage of the voting shares in order to get a seat at the table.

It’s helped by the flop of the IPO, the current penalty against Chinese stocks generally, the continued pressure the Chinese government has placed on Wanda, and they found a legit investment bank who seems willing to play.

Granted, we’re now in year 4(?) of the Collins Cup not happening, so I’d trust PTO to handle this about as much as I’d trust our dog to not crap in our house. Which is to say, I don’t trust them at all.

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Editor-in-Chief, Slowtwitch.com | Twitter

I'd like to see where PTO is actually a member organization. They don't have a website where you can even become a member. They also don't have a Guidestar Profile, so that means they haven't filed taxes. Or aren't actually registered as a Non-profit. And if they haven't filed any taxes, oh my.

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Washed up footy player turned Triathlete.

i know very little about them. but i think it's likely they're a UK-based org. so, if you're looking inside the U.S., that might be why you aren't finding them.

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Dan Empfield
aka Slowman

Although that was a great idea, I jumped over to the Charity Commission Search and found nada: http://apps.charitycommission.gov.uk/.../AdvancedSearch.aspx

So for those want to look up UK charities they can use the above linked search engine.

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Washed up footy player turned Triathlete.

Absolutely agree; I know nothing of finance but they need to clean up that Collins Cup social media account.

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http://www.goalicego.co.uk

In this specific case, can the PTO only be the "sport legitimacy" for a billionaire willing to invest in the sport, but not willing to appear as "taking complete control" of WTC.

Someone ready to bring the money, and OK to leave most of the executive control to a professional athlete organisation (instead of finance vampires :-), for the sake of the sport.

Someone loving triathlon and coming from Bahrein, for exemple ?

Well all this news is not being received too well this morning, finally some volume in trading, but now down to about 4 and a quarter. Seems the street is not taking either the offer or the group seriously. But at least the value keeps going down, so perhaps they can meet at some point. Another 75 cents and it will be at a new low, around 400 million valuation(+ over 1 billion debt of course).

Well my buy order is still in. However, after reading the earnings report I think the stock spiked based on the positive news in the earnings report and then everyone and their mother did some profit-taking. Personally, I'm going to speculate on this stock should the price get close to my target price. But. I will tell you that I also believe in the stock on both the InFront and WTC sub-units. PTO is not a governing body, they're not a member organization.

Whereas if USAT bought Ironman, I have direct voting rights as a member (election just happened). PTO has done nothing to earn any good will and they've only been an antagonist. For Wanda to want to part out the WTC unit to them the offer would need to be tasty. There is zero reason to deal with them as not only do they have no credibility, they've also been a bad citizen in their own right. Whoever runs the socials needs to be fired.

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Washed up footy player turned Triathlete.

However, after reading the earnings report I think the stock spiked based on the positive news in the earnings report and then everyone and their mother did some profit-taking.//

The news was not that great, and the guidance even worse. The stock went up because the banks pumped up the ratings and reports on the stock, and got a lot of their folks that use those reports, to invest their money. Several here predicted exactly what was going on, and they were proved right. Lots of volume going up, and virtually none on the way down now. Without some really positive news coming out before the next earnings, it looks like it is just going to slide back were it was the day before the banks who took a bath on the IPO, got involved.


It makes it really hard to take a lot of ratings seriously, I would be pissed if I had bought at 5 1/2 bucks on their recommendation, and would have now lost over 20% in such a short time..Perhaps buy and hold will one day pull them out, I think so myself, but would rather trade it for awhile before buying and holding. What's your entry point? I think you missed it last time as I recall? I'm going to nibble in the low 4's, and accumulate all the way down in the 3's. Thats the plan anyway...

Not sure how the report actually looks worse. And perhaps I'm looking at this in a vacuum. But just looking at the Mass Participation segment the profit at WSG was up 33% from the same quarter in 2018. Where it lagged was on the InFront side of the business due to the 2018 FIFA World Cup...yet, still in profit. So I suppose we look at things much differently. The earnings report came out and it spiked, so that's positive. Whether the "banks" pumped it or not, doesn't really matter. But I see this scenario happening again in the next quarter...but I'm probably going to be a speculator again.

But back to the point, PTO isn't real. These kinds of organization are a problem for any industry and should not be cheered on.

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Washed up footy player turned Triathlete.

I’d avoid the low 4s and just get in when it starts in the 3s. I see this going low 3s...and then you’ll see it taken over (there are many eyeballing this as a viable option). If you’re a flipper, this won’t be the stock purchase for you. However if you’re okay with holding on, in 5 years this will have value. The US market is not their target (despite how many feel the sun orbits the US). Lots of value here, but who steps up to run it (Wanda doesn’t want to and this low share price will open it for board decisions.

Lot of optimism on the stock price. First, we are in a bull market and here is a stock that is languishing and declining. The volume is nill, and even when something just occurred like a potential offer (serious or not) there was zero interest. Even if the stock went under a dollar, the debt would still make this stock very unattractive. We are interested in this because we have somewhat of a vested interest in seeing the largest race organization in our sport succeed. From an investment standpoint, no one else cares. Maybe a rich benefactor steps in sometime in the future, but for now the Fish Called Wanda will keep swimming on its own. Even if the stock drops to a dollar, a potential sale wouldn’t see it climb that much.