Plans to list a V8 Team on the ASX

[Sol]

On page 72 of this week's BRW, a bean counter, Mr. Steve di Petta of Shepparton Victoria is profiled. Steve is the usual bean counter - big house, BMW, works "100 hours a week", gold tie, 'idotax' number plate. All round humble guy.

He also plans to purchase two V8 licences and float a team on the ASX.

To quote BRM, "This plan is his riskiest of all. Running a V8 Supercar team costs at least $3 million a year and no other team is listed on the stockmarket.

Di Petta is investigating whether the V8 Supercar governing body will allow him to proceed with the plan. He says that if it does he hopes to buy the licences and offer shares to fellow motorsport fans within 12 months. "It's something I've wanted to do for years, he says. It's just a matter of finding the time."

I am increasingly of the opinion that V8 teams would not provide the financial returns that would satisfy shareholders of a public company.

Motorsport teams need to be run by passionate motorsport people with the primary aim of winning and the secondary of making a financial return and building wealth.

[GTRMagic]

Didnt we do this one to death on here, and the funding got to about $16 bucks or something?

I think the financial returns would be fine, i think the issues that would kill an IPO are the $800k-$1m or so listing/subscribing/underwriting fees that are virtually impossible to avoid.

On top of this are the constant disclosure rules of the ASX... given that the team is a racing one, with its primary assets out with 32 other cars at race weekends, it would almost required an ASX release every Monday morning after a race meeting to determine whether the cars blew up or were destroyed.

An incident like Jason Richards' crash would likely give cause for such shares to be suspended from the exchange....

And every piece of paper lodged with the ASX costs a mint in management time in the preparation, as well as lodgement fees, and communications.....

[cavvy]

Originally Posted by GTRMagic

And every piece of paper lodged with the ASX costs a mint in management time in the preparation, as well as lodgement fees, and communications.....

Some on the mining board dont encounter problems albeit temporarily.

[GTRMagic]

They likely wouldnt be as high profile as a V8 Supercar team

[Chucky]

This story has one of two explanations.

Explanation One - This is a planted story along a very similar vein to a couple of others which have surfaced over the last 12-18 months. The general thrust seems to be to try and lend "certainty" to an investment in V8 Supercars to those who might be contemplating purchasing one of the most expensive taxi licences in the country.

Explanation Two - This accountant is a dribbling tool who should be locked up and kicked out of either the CPA or Chartered Accountants (whichever one applies).

[Gaz170]

Lock in "b" please Eddie......

[pete60]

[QUOTE=Sol]
. "Running a V8 Supercar team costs at least $3 million a year and no other team is listed on the stockmarket."

/QUOTE]

And there are damn good reasons why!

Firstly,as GTR said, the costs of floating are huge, certainy way out of proportion to the turnover and profitability of a V8 team.

Secondly, who really knows how much "profit" there is in running a V8 team? After the owners pay themselves whatever it is, how much is left?? I don't recall the team owners falling over themselves to spill their guts on that one. You have to offer an investor more than just the warm and fuzzy feeling of ownership....if there is no return on your investment, the investors are going to ignore you completely.

Thirdly, it would be just about impossible to put a prospectus together...there would be so much blue sky in it you'd need sunnies to read it. Who would want to be a director in that scenario?

Fourthly, if you are a small cap company, forget it. You'l be ignored by the institutional investors, which means you languish out of sight and out of mind on the ASX. The shares are thinly traded and end up riding a rollercoaster of pricing...someone buys a few and, because there are so few trades, the price spikes. Someone sells a parecel and the reverse happens.

I assume this guy is seeking a bit of publicity...otherwise it's just a dumb idea on all levels.