Wasps - the Richest club in the world

[stus768]

They aren't shares. They're bonds. They will be worth the same amount you paid for them at the end (or less, but not more).

You're right they are bonds. But they can go up in value.

 

[Tony Manx]

You're right they are bonds. But they can go up in value.

The only way they can go up in value is if the yield is so good, and the security is so safe, that investors trip over themselves to buy the stated interest rate meaning market forces an increase in the price, and consequently a decrease in the yield, due to demand!

However, that scenario is far less likely than the yield on more secure bonds, such as Government Gilts, increasing in line with interest rates as they must rise in due course. This will result in the price of the Wasps bonds more than likely decreasing for the yield to remain competitive!!!

So if the Wasp bond's yield has to double to remain attractive against alternative bonds, the price will halve!!

 

[stus768]

The only way they can go up in value is if the yield is so good, and the security is so safe, that investors trip over themselves to buy the stated interest rate meaning market forces an increase in the price, and consequently a decrease in the yield, due to demand!

However, that scenario is far less likely than the yield on more secure bonds, such as Government Gilts, increasing in line with interest rates as they must rise in due course. This will result in the price of the Wasps bonds more than likely decreasing for the yield to remain competitive!!!

So if the Wasp bond's yield has to double to remain attractive against alternative bonds, the price will halve!!

I never said they were likely to go up just that they can.

 

[91jmay]

I guess Wasps are gambling on TV rights going through the roof to pay for this fundraising drive. They're leveraging guaranteed money now against a potential future windfall.

Wasps have a revenue source though that many others don't, the Ricoh, so probably less of a gamble than others.

 

[Raggs]

Apparently an email sent out to some fans (STH perhaps) confirms the bond has raised £30m+.

 

[Tony Manx]

Apparently an email sent out to some fans (STH perhaps) confirms the bond has raised £30m+.

I think it is absolutely fantastic that a club on the ropes a short to time ago are now getting this injection. Wonderful!!

Maybe, just maybe other clubs will follow and the English game will be less reliant on the owners and despots who want to take the English game away from their supported such as Saracens who want to play their games all over the world!!!!!

 

[Amiga500]

Wasps are on course to be the richest club in the world within 2 years:

30 - 30 = 0

If they have come out the end of their bond period and are up a load of money off the investments they've made using the bond money, then its a different story.

If I take out a million quid loan from the bank, it doesn't make me a millionaire.

 

[goodNumber10]

30 - 30 = 0

If they have come out the end of their bond period and are up a load of money off the investments they've made using the bond money, then its a different story.

If I take out a million quid loan from the bank, it doesn't make me a millionaire.

No sure if you're picking fault with the richest club comment, not my words, or trying to explain how bank loans work .

 

[Amiga500]

No sure if you're picking fault with the richest club comment

Fault with Wasp's PR "gurus".

Its also an increasing problem in rugby - worship of the 'ol £££$$$€€€...

 

[Raggs]

Actually fault with the reporters. Wasps have regularly claimed that the massive turnover they expect in 2-3 seasons time will make them the richest, but I've not seen them claim that this bond does it, merely helps them on their way.

 

[Tony Manx]

Actually fault with the reporters. Wasps have regularly claimed that the massive turnover they expect in 2-3 seasons time will make them the richest, but I've not seen them claim that this bond does it, merely helps them on their way.

You get 35 at a rate of say 5% per annum and you invest it and make 20% and you are making 15% a year on the 35! Simples!!

Only question is does the investment of 35 provide enough clout to make such a return but if it did not the people who promoted the issue would not have put their name to it never mind that the investors would not have stumped up!!