Williams stock/shares issue

I'm interested in buying shares in Williams when they float next month, I have no clue of where to start! Any ideas!?

I'm interested in buying shares in Williams when they float next month, I have no clue of where to start! Any ideas!?

Unless your a "big player" you probably wont be offered anything in the IPO. Will they be normally traded shares after the IPO?

Why would you want shares in Williams? Unless its out of Big Love for Williams, I would stay away.

Unless your a "big player" you probably wont be offered anything in the IPO. Will they be normally traded shares after the IPO?

yes, that's the way it works. in order to get in when it's first offered, you need a ton of dough, and to make arrangements with one of the banks underwriting the stock. (maybe the better clients of the underwriting banks can get in with less money--I'm not sure.) once those people have plugged in, later in the day, typically, the stock will open for trading on the open market at a higher price. where the stock goes after that is anyone's guess, but the underwriting banks will try to ensure that the stock makes a big splash on it's first day.

given that jimjimjeroo came to this den of thieves looking for guidance [sinister laugh], my guess is that he may wish to speak, in person, to a broker if not a financial advisor.

Edited by Mila, 06 February 2011 - 03:20.

Stark raving mad IMHO, this is far too risky to approach unless you have a wad of cash youre prepared to lose.

Stark raving mad IMHO, this is far too risky to approach unless you have a wad of cash youre prepared to lose.

Yes but this may be one of those things where you buy 1 share and actually have the certificate mailed to you just to put it on the wall.

Yes but this may be one of those things where you buy 1 share and actually have the certificate mailed to you just to put it on the wall.

And it might pay off and prove to be a sound investment a few years from now when Williams go bankrupt.

Yeah, because then the slip of paper has novelty value.

Yes but this may be one of those things where you buy 1 share and actually have the certificate mailed to you just to put it on the wall.

+1 It's a gimmick share proposition. As the saying goes, A fool and their money are easily departed.

Yeah, because then the slip of paper has novelty value.

It's worth about GBP 0.05 right now!

Aside, does anyone else notice this in the Autosport article:

A statement from the team announcing the move said: "The offering will consist of up to 27.39 per cent or 2,739,383 existing shares, with a nominal value of GBP 0.05 each, of which up to 330,000 shares will come from an over-allotment option.

What does that say about the team's valuation?

That either that is the minimum price before anyone bids for them, or you could buy the entire Williams Formula 1 team for less than the price of a season of Formula 3.

Yes I was wondering why they evaluate their own worth so low. Could it be due to the debt burden of the company?

The low price per share is not an issue, many shares are listed for less than one GBP. But it is the small amount of shares that make the 27% that is alarming. Anyway, with such a low price and such few shares there should be no problem in getting subscribed. Where they go from there, is another question altogether.

Amount of shares isn't really a viable way of juding a company's value. What if each share was worth 50? Suddenly buying a third of Williams is really expensive.

Amount of shares and list price together tell us what the company think it is worth, and how much it can raise from the market. Of course this is not the market price, once trading starts the price per share might increase (it cannot fall much lower).

But a company can make more shares available, which doesn't automatically mean increasing the % of ownership. It just dilutes the value of existing shares.

Does it really make sense to float a company on the stock exchange when it does nothing more than race F1 cars? Williams are in my opinion one of the last true racing teams; they're only source of income is from the sponsorship and earnings from putting two cars in a race every two weeks.

But because of this single revenue stream, they've fallen on hard times over the last 15 years. I can see how flotation would be attractive form the teams perspective, but what is going to be attractive for the initial investors?

They also provide engineering services to various companies, have a hybrid power subsidiary, and have a reasonably successful business centre at their factory: they have diversified as much as they know how to, at present.

Does it really make sense to float a company on the stock exchange when it does nothing more than race F1 cars? Williams are in my opinion one of the last true racing teams; they're only source of income is from the sponsorship and earnings from putting two cars in a race every two weeks.

But because of this single revenue stream, they've fallen on hard times over the last 15 years. I can see how flotation would be attractive form the teams perspective, but what is going to be attractive for the initial investors?

Frank and Patrick aren't going to be around for ever, nobody is. Unless their heirs want to step in and take on the roles, the company will eventually be sold. My guess is that in the last few years, they've not found the right quality of of buyer at the right price. The stock market probably lets them divest themselves on their terms (my guess is they want a decent price, but also want to keep the reigns in the short/medium term.)

That said, with the chronic short-term profitism of the stockmarket, and the old adage "To make a small fortune in F1, start with a big one", I have visions that the shareholders will eventually vote to close down the racing side!

I might buy a trivially small number of shares just for the novelty.

It's worth about GBP 0.05 right now!

Aside, does anyone else notice this in the Autosport article:



What does that say about the team's valuation?

Its been awhile but isnt valuation simply an accounting entry. I don't think it has anything to do with the actual underlying value.

But as I said its been awhile since Accounting.

Its been awhile but isnt valuation simply an accounting entry. I don't think it has anything to do with the actual underlying value.

But as I said its been awhile since Accounting.

You mean the market value? That will be determined once trading begins and the share value settles at some number. It cannot go much lower or they'll become one of those penny stock and get delisted!

But that was not my point. My point was Williams are giving away ~27% of the company for a very small amount. No matter what the eventual value of a share once it floats, the issue subscription will yield very little cash. It appears this decision may have been forced on them by their creditors, and is a move to bring in better management.

It's worth about GBP 0.05 right now!

Aside, does anyone else notice this in the Autosport article:


What does that say about the team's valuation?

Nominal value says nothing about the value of shares or the company. It is just a record of the capital that went into the company at the time of incorporation and the corrections to that position by changes to the capital position.

The equity side of a company can be a million times their nominal capital if they have accumulated huge profits over the years, although this is very unlikely in the case of Williams GP.
To valuate a private company you would have to make a record of their profit history and a future prognosis for a decade or a similar period. It is already known that Williams did not have significant profits and are not very likely to have any in the near future.

So the valuation will probably come from the emotional value that fans attach to owning some shares of the company. This value will be forecasted by the bank that runs the IPO by using similar issues like football clubs who have run IPOs in the past. It is called the book building. For book building they will announce a potential trading band for the share value in the next week. That should be a first indication what it will cost you to support Williams that way. At that point the IPO can still collaps if not enough banks sign up for the shares. If the banks take enough orders to make the IPO go ahead it will all depend of the future profit expectations how the share price will develop in the future.

IMO there is only one way realistically from the IPO price and that is down. Should Williams manage to get into a top three position in 2011 or 2012 you may see a chance that you will make money in five years time but that is unlikely either. I would wait for 6 months from now and buy the devalued shares cheap when they are 10% of the IPO value if you are simply keen to be a Williams share owner.

Terrible investment IMO. Don't waste your money.

Nominal value says nothing about the value of shares or the company. It is just a record of the capital that went into the company at the time of incorporation and the corrections to that position by changes to the capital position.

The equity side of a company can be a million times their nominal capital if they have accumulated huge profits over the years, although this is very unlikely in the case of Williams GP.
To valuate a private company you would have to make a record of their profit history and a future prognosis for a decade or a similar period. It is already known that Williams did not have significant profits and are not very likely to have any in the near future.

So the valuation will probably come from the emotional value that fans attach to owning some shares of the company. This value will be forecasted by the bank that runs the IPO by using similar issues like football clubs who have run IPOs in the past. It is called the book building. For book building they will announce a potential trading band for the share value in the next week. That should be a first indication what it will cost you to support Williams that way. At that point the IPO can still collaps if not enough banks sign up for the shares. If the banks take enough orders to make the IPO go ahead it will all depend of the future profit expectations how the share price will develop in the future.

IMO there is only one way realistically from the IPO price and that is down. Should Williams manage to get into a top three position in 2011 or 2012 you may see a chance that you will make money in five years time but that is unlikely either. I would wait for 6 months from now and buy the devalued shares cheap when they are 10% of the IPO value if you are simply keen to be a Williams share owner.

Surprised though I am to be in agreement with you ( ), you are correct that the £0.05 is totally irrelevant to value after a company has been created. In this case, it is likely to be the currency adopted when the present corporate entity was established decades ago.
The odd thing here is that Williams are going to be taken public by a twee Continental bank. One would think that the great majority of their potential shareholders live in Britain, not Switzerland. The bank that they chose is tres minor league. It is not going to have much in the way of an institutional distribution network. The size of the flotation is going to be small, in any case, and I'd expect them for the most part to put it into their own discretionary client accounts, rather than embarking on some major book-building exercise.
As you and others have said, there will be opportunities aplenty to buy in the secondary market. The idea, however, that in 6 months they will be trading at a tenth of the IPO price, although theoretically possible, is remote indeed.

Why would you want shares in Williams? Unless its out of Big Love for Williams, I would stay away.

To be fair, your opinion on the merits of investing was not requested,

What has it got to do with you whether someone else wants to invest ??

Because you should never invest emotionally.

Because you should never invest emotionally.

Very true, although that is a principle that is violated by thousands of market professionals every day of the week.
The rightness of that principle does not, however, imply that one ought not to buy shares for the same emotional reasons that one buys team kit, and goodness knows enough of that stuff is churned out and scarfed up by punters every year.

Primer - you have commented a couple of times as follows - "My point was Williams are giving away ~27% of the company for a very small amount.". At present we have no idea of Williams' valuation that the 27% represents. The nominal or par value of the shares is irrelevant as that's not the price that the shares will be floated at. So for example the 2,739,383 shares may be offered at a price of 50p which would value the 27% at £1,369,691 hence the entire Williams company at £5,072,931. BUT if the shares are offered at say £50 then Williams is valued at 100 times this which equates to a bit over £500m. On floatation the final share typically is not decided until the last minute depending on the level of interest from potential buyers. So we won't know what Williams is "worth" until the morning of the float. By the way, in general the shares will only be offered to institutional investors and not to individuals (unless as others have said the individual has pots to invest or is well connected). Hope that clears up any misunderstandings.
ecurieecosse

I'm going to try and buy one share. I could care less if they go broke by the end of this year, I've wasted far more money on others things. Its a novelty thing.

A burger chain in NZ floated recently - they offered their shares over the counter at the stores, so if you want you can sell small chunks of shares to individuals.

Anyway before dismissing it as a bad investment have a look at what's on offer first.

To me the share issue stinks of desperation.

Terrible investment IMO. Don't waste your money.

Compared to what? BP shares?

What about "investing" in a genuine Scuderia Ferrari shirt? Buy it for £75 new from Ferrari Store, sell it for £5 on ebay.

Ferrari shirt or Williams shares? I know which I'd prefer to "invest" in.

To me the share issue stinks of desperation.

They've said the money isn't for the team, therefore its either for Sir Frank Williams and Patrick head or for investment in one of their other businesses/setting up a new business. It doesn't smell of anything until we hear more details. The only information that we have is that it's not for the team, hence not out of desperation.

Off topic, but actually BP shares have been bloody good recently. The thing is no serious investor would buy into a motorsport project, and that leaves the fans to do it. Which is kinda nice.

Compared to what? BP shares?

What about "investing" in a genuine Scuderia Ferrari shirt? Buy it for £75 new from Ferrari Store, sell it for £5 on ebay.

Ferrari shirt or Williams shares? I know which I'd prefer to "invest" in.

I think you mainly buy clothing to wear it...

What about "investing" in a genuine Scuderia Ferrari shirt? Buy it for £75 new from Ferrari Store, sell it for £5 on ebay.

Williams have team merchandise too, you know. Ferrari merchandise just has higher demand because they are to F1 what Brazil is to Soccer world cup: any ignoramus who wants to fit-in buys their colors. This demand -and Ferrari's premium positioning thanks to their expensive road cars- is also what allows them to charge a big amount for their shirts. They can make £7500 by selling 100 shirts at £75, or by selling 750 shirts at £10.

They've taken the sensible route. <Hatersgonnahate.gif>

Ferrari shirt or Williams shares? I know which I'd prefer to "invest" in.

The point is neither is what you would call an investment. I don't even know why you are dragging Ferrari and merchandise into this!
Fiat paid $167 million to buy back 5% from Mubadala. The Williams share in comparision is toilet paper. Used.

How much profit does a mid grid F1 team generate?

F1 is a very risky business. Williams as a company have been on the slide. How is that attractive for any investor? Its looking more like "We really really need the money" scenario. Does this mean all mid grid teams are operating with a noose around their necks? Has F1 become so obscenely expensive?

Does this mean all mid grid teams are operating with a noose around their necks?

IIRC the money they get from FOM (or CVC whatever) is a big part of their income and what keeps many teams running.

Has F1 become so obscenely expensive?

Joined: September 03

How much profit does a mid grid F1 team generate? F1 is a very risky business. Williams as a company have been on the slide. How is that attractive for any investor? Its looking more like "We really really need the money" scenario. Does this mean all mid grid teams are operating with a noose around their necks? Has F1 become so obscenely expensive?

Out of the twelve teams in F1 only the top four have a balanced budget. From Renault down teams are in a constant cash flow crisis and need to sell their seats to pay drivers to cover the budget. This is not considered healthy at a time when sponsorship is extremely hard to come by even for traditionally successful teams like Williams.

F1 is indeed still too expensive and has not even reached the final level of resource restriction agreed in the 2009 agreement. It is certainly not the time to increase cost until at least six to eight teams can live of an assured budget again. FOTA have been treading a very fine line between disaster and conflict for the last 18 months.

is there a prospectus for this share? something i can read to understand what one is buying? also i read on the Autosport article that there will be distribution in Canada, how does that work? currently I am being guided by emotions but would love to read some sort of share prospectus.

Because you should never invest emotionally.

Indeed. And neither for the short term.

Williams share issue.

The odd thing here is that Williams are going to be taken public by a twee Continental bank. One would think that the great majority of their potential shareholders live in Britain, not Switzerland. The bank that they chose is tres minor league. It is not going to have much in the way of an institutional distribution network. The size of the flotation is going to be small, in any case, and I'd expect them for the most part to put it into their own discretionary client accounts, rather than embarking on some major book-building exercise.

Perhaps it might be worthwhile to consider this a little more deeply.

The Williams technology portfolio is more than just their F1 team. They have made considerable progress with the Williams Hybrid Power company, particularly the involvement with Porsche.

Given the new VAG progress with Hybrid vehicles becoming more apparent perhaps the choice of “an obscure, third tier German Bank" gives some indication of their intended audience. More Here


Perhaps we will see more applications of this MLC technology as things progress.



Makes one think!........Hmmmm




Charlie

I think I read somewhere that Porsche was cooling a bit on the flywheel technology, stating it would only work on something like the GT2RS (=extreme roadcar) and not on the 'bread-and-butter' models.

Does anyone know how an average person can purchase these shares, and if they will be avaliable in the United Kingdom

They have made considerable progress with the Williams Hybrid Power company, particularly the involvement with Porsche.

This is like calling Williams a catering company because someone once made tea in the motorhome kitchen. Their hybrid 'solution' is impractical with no future other than some prototype Porsche toys.

Wow, a company that build 'hybrid' tech that might be used by as many as twenty or thirty cars! Let me invest!!

Edited by primer, 08 February 2011 - 00:35.

IIRC the money they get from FOM (or CVC whatever) is a big part of their income and what keeps many teams running.


Joined: September 03

Yes I joined abt 7 yrs ago. But with the engine freeze, gearbox longevity, lesser tyres etc, I thought F1 had become more manageable for them.

---------------

..... And neither for the short term.

Why?

Edited by ViMaMo, 08 February 2011 - 00:58.

Williams supply the entire Formula 2 field don't they?

I'd be interested in buying a very small amount of shares just for the hell of it. I own plenty of other Williams merchandise so why not a tiny piece of the team? Not a purchase to make money but just as a part of a 'collection'.

Williams (and Mclaren and Ferrari) get additional income above the standard prize money for being a historical team.

They have their hybrid tech - which now includes battery storage as well as fly wheel. The fly wheel part of the company is now focussing on things such as trucks and trains, rather than simply cars.

There is the F2 grid, the golf clubs, the educational dvd's, corporate events - all minor stuff I know but still it shows that they are trying to diversify and get income from using their assets and technologies to get income from non F1 based activities. Who knows why they need capital, it could be investing in one of these businesses or creating an entirely new business. They have a dedicated R&D Facility in Qatar as well as all the R&D that goes on in the UK.

Report

It says Williams will be trading between €24 and €29 valuing the company around GBP 250m. I don't believe it. The report says that Williams made a profit for the last three years and holds a net cash position of some GBP 25m. There is no mention of debt.

Edited by WhiteBlue, 09 February 2011 - 08:47.

Report

It says Williams will be trading between €24 and €29 valuing the company around GBP 250m. I don't believe it. The report says that Williams made a profit for the last three years and holds a net cash position of some GBP 25m. There is no mention of debt.

They have repeatedly said that they took alot of debt after BMW left but have been profitable for the last few years - no one has really believed it though as it would have been a huge turn around, I guess they made drastic changes some time around 2008. It's good to know that they are healthy financially.

Either they're in profit or they aren't, it will be listed in their company reports. It doesn't automatically mean a sharp increase in income, it could simply be a dramatic reduction in costs.