Indians stock takes hit

January 23, 2009
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rowdieDespite year-over-year revenue gains and robust earnings, it appears the economy might have finally caught up with the Indianapolis Indians. For years, this AAA baseball franchise has steamed along with solid attendance and $1 million plus annual profits. Profits for 2008 were $1.23 million.

But now, stock brokers making a market in Indians stock are showing less confidence in this franchise’s thinly traded stock. The franchise too, has pulled back the reins on its stock buyback offer. While the Indians board reduced its stock buyback price from the $21,832 per share it offered last year to $21,328 it's offering this year, market makers are pulling back much harder.

Even though the stock has traded at a 52-week high of $25,000 and a 52-week low of $23,250, market makers are currently only offering between $17,500 and $17,250 per share. Since there are 767 outstanding shares remaining, that puts a paltry price tag of $13.4 million on the entire franchise. The team's buyback offer price puts a $16.4 million value on the franchise.

Two factors would seem to put Indians stock in strong favor. First, the team has been a consistent financial winner, despite economic downturns. This coming season will no doubt be a stern test. Second, since the franchise is retiring all shares it acquires, it would stand to reason that the value of the remaining shares would increase since they become a larger slice of the pie.

Sports business experts said when market and consumer confidence returns, the team’s value will be at least $25 million, putting the share price at more than $32,500. Until then, the market makers are likely to continue their low ball offers.
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  • I think the stock is still worth an easy $25,000 per share from what I've seen of the financials. Interestingly, Forbes just put out a report about how many pro franchise values are over-estimated. But I still think the Indians is a very solid buy, certainly at $21,000 or $22,000.
  • No wonder the stock is taking a hit... if the guy in the picture is the CFO, they won't last the summer.
  • Anyone look at their 401K lately? Doesn't seem to hard to believe the stock of the Indians is falling like every other one.

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  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

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