Dick Knights shares

[Creaky]

Assuming the long post last night by the poster who said that s/he'd heard from DK contained the full text of DK's email, I'm not sure that it's going to get that far. DK, in that text, said he's got three choices:

1) sell at 1p/share to the un-named purchaser
2) request that the auditors place a fair value on the shares. He is then compelled to sell at that price to the unnamed purchaser. It isn't stated, but presumably the purchaser is also compelled to buy at that price.
3) tell the Board by 5 April that he no longer wants to sell the shares.

DK has stated, in that text, that he considers 1p/share "derisory", so presumably he won't choose option 1.

Option 2 is, for DK, fraught with risk in two ways:

A) If the auditors value the shares at materially less than £1/share, he'll look a bit of a dick (pun intended) to the fanbase, who know he's "valued" them at £1. He runs the risk of looking naive at best; trying to grab money for personal gain off fans at worst.

B) He's forced to sell them at that valuation. If he genuinely considers that the shares are now, or will be in the future, worth more than that (at least to him), he may rue the day that he had to sell them.

That leaves option 3.

I have three predictions:

1) DK will withdraw the offer, citing disappointment that the Board have stymied his plans.

2) DK will also give as one of the reasons his discomfort that the company's auditors, who are of course paid their audit fees, and the cost of the valuation exercise by BHA, are appointed by the club and are thus not "truly independent". He'll need to be careful with the latter point - the auditors could sue for libel (as individual partners) if he pushes any "they're in the club's pocket" line too far.

3) In the same way the BBC et al picked up on the "ex-chairman wants to sell shares to fans" stuff, they'll also get a story along the lines of "big, bad club prevents fans from buying shares".

There is another option - he could reduce the number of shares he is offering for sale to 262.

 

[hans kraay fan club]

There is another option - he could reduce the number of shares he is offering for sale to 262.

What does that change? The 'un-named shareholder' would still have the same right to make the pre-emptive market rate offer.

 

[Buzzer]

There is another option - he could reduce the number of shares he is offering for sale to 262.

The value per share would remain the same and the mystery shareholder would still have first dibs and from the tone of DK's email would probably exercise the right to buy at 1p or the market rate.

 

[Lady Whistledown]

I agree. Also it appears from the book that he picked the team, made all the signings and chose the tactics!

Yes indeed. For me, there were just a few too many passages like this:

'Robbie [Savage] was interested, and said he would come down to Brighton. When he told my old friend from Hull, Adam Pearson, now chairman of Derby, Adam said to him, "That means I have got to deal with Dick Knight, he'll screw me into the ground!"'.

I don't think all of this shares business is about giving supporters a say, nor do I think it's about making Dick Knight money. It just reiterates how pissed off he was at having to cede the chairmanship (& thus, dare I say it, the limelight/ fan worship, insofar as there was any) to someone else who'd invested a great deal more money. And he's trying to position himself as some sort of People's Champion battling up against the rich bad guys, to curry favour amongst supporters and preserve his own reputation.

Dick: nobody thinks badly of you. We're all extremely grateful for what you've done, and that will never be forgotten. Your legacy isn't being buried under stacks of Sky money and corporate boxes. Your name will always be spoken of by supporters of this club in positive terms. But things evolve, and you can't possibly have expected the Albion to continue operating like the one man band they were at Withdean, nor to have expected someone who put over a hundred million pounds into the club to sit quietly in the shadows & watch you toy with his investment.

You don't need to buy our affections, or to play us off against the club via the media. Move on.

 

[Brighton Breezy]

Agree with your first point. It was good copy but probably already to a captive audience. Second point - Did DK expect just 262 people to respond? I suspect not. If you had asked me before all this how many he would have sold, I reckon I'd have said maybe 1200 people asking for 25 shares each and a nice little £30k in his back pocket. 262 is a remarkably low figure.

Third point - does it do any harm? Not really but it's an administrative ballache. I don't blame the club fr blocking this.

Even if it had netted him £30,000, I wouldn't really have an issue with that. Up to people whether they paid the £1 a share price and wouldn't have begrudged Knight that after all he did but I wasn't expecting more than a few hundred people to want a handful of shares each. Given the ACTUAL value of them I thought most people would just get one share or maybe a fiver's worth or something. Just to put a certificate in a frame on their wall saying they were a shareholder. Maybe as a present for someone.

 

[Tim Over Whelmed]

I cannot imagine the share issue actually sold any more copies of the book. Anyone buying a copy to get the voucher so they could own a share in the club would surely be the sort of person who would have already been buying it anyway.

Good publicity? Yes. But I bet it did not sell a single extra copy of the book JUST because people wanted to buy a share.

And it isn't like selling shares to 262 people would net Dick Knight a small fortune is it? Probably less than a £1,000. So it isn't a money-making exercise in that sense either.

I just don't see the harm in allowing a few fans to buy a share if they want to.

Other than the huge administrative cost to BHAFC servicing the rights of so many minority shareholders, to me it's just spiteful and serves no benefit to the fans (they're worthless), to the club (it's more cost) and to TB (just throws his generosity back in his face)

 

[Creaky]

The value per share would remain the same and the mystery shareholder would still have first dibs and from the tone of DK's email would probably exercise the right to buy at 1p or the market rate.

But would negate Goldstone's argument that their would be a risk to DK in allowing the auditors to go ahead with a share valuation

"He's forced to sell them at that valuation. If he genuinely considers that the shares are now, or will be in the future, worth more than that (at least to him), he may rue the day that he had to sell them."

 

[Not Andy Naylor]

Let's say, for argument's sake, that the auditors value the shares at 99p. The unnamed shareholder - who presumably was looking at spending £1000 if it even came to that - might be rather miffed (not to mention out of pocket) to have to fork out £99k - assuming the auditors' valuation is binding on both parties?

 

[Buzzer]

Even if it had netted him £30,000, I wouldn't really have an issue with that. Up to people whether they paid the £1 a share price and wouldn't have begrudged Knight that after all he did.

Oh, me neither. I don't begrudge him at all. I was responding to your point that selling less to 262 will net him less than £1000. I don't think he thought it would be that low and I was giving a back of a fag packet estimate of what I thought he could have netted if you'd asked me before all this.

 

[Creaky]

Other than the huge administrative cost to BHAFC servicing the rights of so many minority shareholders, to me it's just spiteful and serves no benefit to the fans (they're worthless), to the club (it's more cost) and to TB (just throws his generosity back in his face)

Wow - providing a lounge with 262 extra chairs once a year for the AGM, emailing the annual accounts to 262 additional people and keeping a share recording for 262 people - yep I can see how that would be huge!!!!

 

[Goldstone1976]

But would negate Goldstone's argument that their would be a risk to DK in allowing the auditors to go ahead with a share valuation

"He's forced to sell them at that valuation. If he genuinely considers that the shares are now, or will be in the future, worth more than that (at least to him), he may rue the day that he had to sell them."

It would negate point B, for sure; but not all of point A. He'd still have to explain why he'd valued them at £1 and the auditors valued them at, say, 2p.

For a man who is reputedly keen on preserving his image, such exposure would, imo, be seriously damaging to his self-perception. It's much safer for DK to simply withdraw the offer and blame the club. That way, his ego can remain intact. No?

 

[Brighton Breezy]

Oh, me neither. I don't begrudge him at all. I was responding to your point that selling less to 262 will net him less than £1000. I don't think he thought it would be that low and I was giving a back of a fag packet estimate of what I thought he could have netted if you'd asked me before all this.

I agree I thought a few more people would want them, but not sure the average number of share each would have been as high as 25 although I suppose it only takes a few people wanting 100 or so to bump the average up, so quite possibly.

Just, perhaps naively, assumed most people would only want one or maybe five/ten as there is no real benefit to owning loads.

 

[Goldstone1976]

Let's say, for argument's sake, that the auditors value the shares at 99p. The unnamed shareholder - who presumably was looking at spending £1000 if it even came to that - might be rather miffed (not to mention out of pocket) to have to fork out £99k - assuming the auditors' valuation is binding on both parties?

One would assume that the risk of the shares being valued at 99p by the auditors was factored into the unnamed shareholder's thinking already. So, either s/he is happy to pay 99p if it comes to it, or they have made a calculated decision that there's no way in hell they'll be valued at 99p (or both, of course)

 

[Buzzer]

But would negate Goldstone's argument that their would be a risk to DK in allowing the auditors to go ahead with a share valuation

"He's forced to sell them at that valuation. If he genuinely considers that the shares are now, or will be in the future, worth more than that (at least to him), he may rue the day that he had to sell them."

Eh? I don't think you quite understand. Goldstone1976's point was about the risk of selling all the shares (which is DK's current position) at market value. You were the one who suggested DK selling just 262 and I wrote that the value per share remains the same, the right to buy remains the same also.

 

[Goldstone1976]

Eh? I don't think you quite understand. Goldstone1976's point was about the risk of selling all the shares (which is DK's current position) at market value. You were the one who suggested DK selling just 262 and I wrote that the value per share remains the same, the right to buy remains the same also.

Thanks for defending me! I'd read Creaky's comment as meaning if DK revised his request to sell 100k shares down to 262, he'd not make a large financial loss if he had to sell at, say, 2p now but later someone did offer, say, £2, or whatever. A point which is valid. However, it doesn't counter point A of my argument, which I explain in post # 95

Apropos of nothing, I know of at least two people who wanted 5k shares and at least one who wanted 10k+. These people may or may not be happy with just one.

 

[hans kraay fan club]

Apropos of nothing, I know of at least two people who wanted 5k shares and at least one who wanted 10k+. These people may or may not be happy with just one.

Can you please pass me their details?

I've still got these bloody magic beans to shift.

 

[drew]

It's not the people's club anymore. All those who saved the club from Archer and Co are now consigned to its history. Ain't money marvellous.

Hate to burst your bubble but when was it ever the people's club? It has always been a private limited company with a small number of shareholders and DK didn't change that. Yes, the fans were galvanised into a massive publicity affair to rest control from Archer and then for planning permission but at no time did the people own the club.

I've been split on this issue since it arose.

As Ray Winston said about his latest film ‘A little controversy doesn’t hurt’ and I’m sure that was the case pushing the share issue at the same time as the book release. If there is one thing that DK is good at, its all the sales stuff.

Knight was great for BHA. He got rid of Archer, we came back to Brighton, Planning permission was achieved under him and we did well on the pitch. There were some terrifically committed players under his chairmanship (Cullip, Carpenter, Oatway etc) and I’m sure the club ethos at the time helped create that. I stand to be corrected without going back to look at the finances but he ploughed his own money into the club to keep it going and he is now left without power or a share in the club of any nominal value. Given that he paid off Archer to the tune of 800K for £60 worth of shares, I can see how it would stick in the throat if all I was left with, after all that, was a nice seat, some essentially worthless shares, 7 figures down and a Mickey mouse title.

That all said, I’d like to think if it was me, I’d take one look at the stadium, the players on the pitch now and realise that it was all worth it given the club is more important than one man (which is curiously his argument against Bloom) and like to think I played my part in achieving that rather than hold a grudge because it wasn’t me in the hot seat, which from where I am sat, is what it looks like.

Where I also disagree with Knight was his assertion that he wanted to see the Stadium Project through whilst Bloom waited in the wings. Its naïve in the extreme to believe that someone would front up 100m+ and let someone else take the glory and control the club. Similarly, he seemed to turn on Perry for protecting his job which again I find naïve for someone who has worked in Corporate for so long – Anyone that’s astute knows what happens in this situation. Lastly, I don’t hear Norman Cook moaning that he has spent loads of money on a worthless bit of paper – He and others accepted that they would probably never see that money again.

On balance then, give it up DK.

Whilst I agree with your final sentiment, the rest seems to imply that it was only DKs money that saved the club rather than the combined board. Also, whilst planning permission was achieved under him, was that not more down to the work of Martin Perry!

I cannot imagine the share issue actually sold any more copies of the book. Anyone buying a copy to get the voucher so they could own a share in the club would surely be the sort of person who would have already been buying it anyway.

Good publicity? Yes. But I bet it did not sell a single extra copy of the book JUST because people wanted to buy a share.

And it isn't like selling shares to 262 people would net Dick Knight a small fortune is it? Probably less than a £1,000. So it isn't a money-making exercise in that sense either.

I just don't see the harm in allowing a few fans to buy a share if they want to.

It generated an awful lot of publicity at the time which promoted the book which was what he was probably after all along.

 

[Oscar]

Whilst I agree with your final sentiment, the rest seems to imply that it was only DKs money that saved the club rather than the combined board. Also, whilst planning permission was achieved under him, was that not more down to the work of Martin Perry!

I have to say that I felt Dick rather undermined Martin Perry in his book. The "shoulder to cry on" line felt like an unnecessary personal dig to go with tales of having to step into meetings Martin was heading to save deals.

I'm not sure if he meant it to read that way, but the book is very all-about-me and rarely even makes reference to the board and Dick's fellow directors in making the decisions that got us back from Gillingham and then to Falmer.

Of course it is Dick's pig-headedness and want to achieve that meant we made it to achieve planning permission for the Amex. Others would have walked away. Dick clearly feels bitter about not getting the chance to see his dream through without the Tony Bloom taking centre stage as chairman - not that he does mind.

I'd of liked some shares but I didn't like the tone of the book much and the way Dick used those shares as bait to rile the board and bring the club into potential disrepute with the fans.

 

[Lady Whistledown]

Agreed, the "shoulder to cry on" line felt a little personal and unnecessary to me.

It's not as though Bloom has ever sought to be the centre of attention anyway. He's rarely seen in the press, nor milking the public affection on the pitch.

 

[Racek]

Agreed, the "shoulder to cry on" line felt a little personal and unnecessary to me.

It's not as though Bloom has ever sought to be the centre of attention anyway. He's rarely seen in the press, nor milking the public affection on the pitch.

No, but he does get the train back from away matches where 30 men stand round him chanting his name.