Wata - A year and a half after

[ExplodedHamster | 404]

2 minutes ago, doner24 said:

Yeah, I’m sure. But typically you don’t disclose that to the SEC unless you are raising capital from outside investors, weather accredited or unaccredited. Hence the $220Kish they seemed to have raised for equity stakes per that document. 

What’s the date on that filing? I’m not sure of the requirements, but it’s quite possible they raised more after the fact, isn’t it? I legit don’t know any of these rules or procedures for filing, so genuinely curious.

 

Edited November 8, 2019 by ExplodedHamster

[tbone3969 | 306]

18 minutes ago, doner24 said:

It is funny that you brought up Baseball cards though as that’s my other main hobby and one I’ve spent substantially more on the last year. 
 

Beckett specifically is reeling from accusations of conflicts of interest in their grading, so much so that the FBI is getting involved in the case due to alleged fraud between the company/employees.
 

I am in no way insinuating anything fraudulent is happening here, but it goes back to what Arch said earlier today, this didn’t have to happen this way. You can do this by eliminating as much conflict of interest as possible by limiting the near term ability of equity holders to make profit hoping that long term business is secured by an elevated sense of trust between the company and the market. 

I just researched about the Beckett grading scandal and boy it seems rampant.  Seems these shenanigans are happening in all hobbies.  How do you feel about PSA grading?  Are they the best?

[Bronty | 187]

1 minute ago, arch_8ngel said:

I'd think you'd just put them in a position of equity and profit-sharing, and it is up to the investor as to how much compensation they want for their risk.

It doesn't seem like that tough of a problem to get around.

 

Yes the ROI is "easier to get" by letting them use the service, but that is the trade you make to have the service avoid the appearance of conflicts.

I'm not sure there's any money in grading services period.

I was approached when wata started to be a possible investor.

A) I didn't have the money; and

B) looking at the plan, I didn't see where any money was going to be made.   Sure, you get 40 bucks or whatever for a grade that takes you three seconds but its all the other time spent that kills your margin.     You open a box.   you unpack it.   You put it in a queue.    Damn, the customer never filled out the submission form.   Call them.   Cant reach them.   They call you back three days later.   You grade them.    Customer didn't specify how they want it shipped.   One of the games has to be rejected.    Have to explain that to the customer.   They fight you on it, they don't think its a reseal.

There are just so many potential time sinks.    Just unpacking, getting the order sorted out, casing, and repacking and shipping is a PITA.

You need a lot of volume to make it work.   Maybe they have that now, but it was far from a sure thing IMO

[doner24 | 1,197]

1 minute ago, tbone3969 said:

I just researched about the Beckett grading scandal and boy it seems rampant.  Seems these shenanigans are happening in all hobbies.  How do you feel about PSA grading?  Are they the best?

I don’t have an opinion because I only deal in ungraded cards. I like opening boxes and acting like I’m 10 again, and I fund it by speculating on prospects that I think are due for spikes. 

[ExplodedHamster | 404]

4 minutes ago, Bronty said:

I'm not sure there's any money in grading services period.

I was approached when wata started to be a possible investor.

A) I didn't have the money; and

B) looking at the plan, I didn't see where any money was going to be made.   Sure, you get 40 bucks or whatever for a grade that takes you three seconds but its all the other time spent that kills your margin.     You open a box.   you unpack it.   You put it in a queue.    Damn, the customer never filled out the submission form.   Call them.   Cant reach them.   They call you back three days later.   You grade them.    Customer didn't specify how they want it shipped.   One of the games has to be rejected.    Have to explain that to the customer.   They fight you on it, they don't think its a reseal.

There are just so many potential time sinks.    Just unpacking, getting the order sorted out, casing, and repacking and shipping is a PITA.

You need a lot of volume to make it work.   Maybe they have that now, but it was far from a sure thing IMO

Yes, I similarly said no. The two ways to make money are from the market itself and/or a buyout. Otherwise, you ain’t gettin’ your money back before you die.

I also didn’t have the money and probably thought they were crazy at the time .

Edited November 8, 2019 by ExplodedHamster

[doner24 | 1,197]

9 minutes ago, ExplodedHamster said:

Equity is one possibility, but you still need money for operating costs, legal fees, etc.

They get that equity for capital infusion. 

[Bronty | 187]

Yeah.   

13 minutes ago, ExplodedHamster said:

Yes, I similarly said no. The two ways to make money are from the market itself and/or a buyout. Otherwise, you ain’t gettin’ your money back before you die.

I also didn’t have the money and probably thought they were crazy at the time .

Right.   I mean I really don’t know, but I always interpreted the fact that some of the grading COs were started by auction houses meant the grading co’s were a means to an end.   The end being all that consignment revenue from all the high dollar value items that now flow through auction houses instead of eBay and private dealers.    

For example, if someone pays a $1k fee to grade an action 1 and the auction houses cut of the actual sale is 100k, what are they really interested in, the consignment fee of 100k or the grading service fee of 1k that made the consignment possible by turning condition into a number?    Deniz disagreed on that at the time; I’m just speculating and don’t know but that’s how I look at it....  that grading exists to stratify condition to enable sale.    I don’t think that’s a reach.  The question is , is the money made enabling the sale or on the sale itself?    I’d argue it’s the latter and that it’s probably not even close.

Edited November 8, 2019 by Bronty

[doner24 | 1,197]

8 minutes ago, Bronty said:

Yeah.   

Right.   I mean I really don’t know, but I always interpreted the fact that some of the grading COs were started by auction houses meant the grading co’s were a means to an end.   The end being all that consignment revenue from all the high dollar value items that now flow through auction houses instead of eBay and private dealers.    

For example, if someone pays a $1k fee to grade an action 1 and the auction houses cut of the actual sale is 100k, what are they really interested in, the consignment or the grading service that made the consignment possible?    Deniz disagreed on that at the time; I’m just speculating and don’t know but that’s how I look at it

Man, I don’t know that I agree but I don’t know that I disagree. They make tons of money grading baseball cards (I have no idea on comics and coins). 
 

The problem I see is the far more finite amount of games being graded versus cards. Cards have a far longer history, similar to coins and comics, plus the new cards are instantly ripe for grading, which is a little different than games for sure. 

[Bronty | 187]

1 minute ago, doner24 said:

Man, I don’t know that I agree but I don’t know that I disagree. They make tons of money grading baseball cards (I have no idea on comics and coins). 
 

The problem I see is the far more finite amount of games being graded versus cards. Cards have a far longer history, similar to coins and comics, plus the new cards are instantly ripe for grading, which is a little different than cards for sure. 

Sure, although I’m stating my ‘means to an end’ bit more in the context of those other hobbies.    Games as you say are quantity limited but you get enough people interested and then it becomes more worthwhile to grade crappier stuff I guess

[Bronty | 187]

4 minutes ago, doner24 said:

Man, I don’t know that I agree but I don’t know that I disagree. They make tons of money grading baseball cards (I have no idea on comics and coins). 
 

The problem I see is the far more finite amount of games being graded versus cards. Cards have a far longer history, similar to coins and comics, plus the new cards are instantly ripe for grading, which is a little different than cards for sure. 

From what I’ve heard the comic grading people lost money for a good number of years but make good profits now.   Don’t know if that’s accurate but that’s a lot of effort for mixed success no?    

Edited November 8, 2019 by Bronty

[arch_8ngel | 1,597]

21 minutes ago, Bronty said:

I'm not sure there's any money in grading services period.

Come now.  These services wouldn't exist if "there wasn't any money in grading services period".

CLCT (Collectors Universe) is a publicly traded authentication/grading service with market cap of almost $260MM, and a net profit margin of almost 18%.

Nobody is starting a grading service as a charity or community service.

Wata and VGA exist to make money, because presumably, they believe there is money to be made.

Edited November 8, 2019 by arch_8ngel

[Bronty | 187]

3 minutes ago, arch_8ngel said:

Come now.  These services wouldn't exist if "there wasn't any money in grading services period".

CLCT (Collectors Universe) is a publicly traded authentication/grading service with market cap of almost $260MM, and a net profit margin of almost 18%.

Nobody is starting a grading service as a charity or community service.

Wata and VGA exist to make money, because presumably, they believe there is money to be made.

I don't know.   Risky venture.   Limited upside.  IMO. 

But, as I said, I have no real knowledge of it.

Let's say you had 500k to invest pre wata.    Would you have done better by buying 500k worth of games?   Or by investing 500k in wata itself?

I'm guessing you would have already tripled your money if you did the former.   And you're probably five years away from getting paid back if you did the latter (*time frame pulled squarely out of my butt).

Edited November 8, 2019 by Bronty

[arch_8ngel | 1,597]

7 minutes ago, doner24 said:

Man, I don’t know that I agree but I don’t know that I disagree. They make tons of money grading baseball cards (I have no idea on comics and coins). 
 

The problem I see is the far more finite amount of games being graded versus cards. Cards have a far longer history, similar to coins and comics, plus the new cards are instantly ripe for grading, which is a little different than cards for sure. 

https://en.wikipedia.org/wiki/Collectors_Universe

These guys make bank.

PCGS and PSA are divisions of CLCT.

[MrMark0673 | 197]

Matt and I were asked about considering involvement in the advisory board as well as exploring other involvement (financial involvement) on December 4th 2017.  It never went further than a few PM's and a few text messages.

I am a teacher, a dad, own a small business, and manage a bunch of real estate.  I didn't have the time to commit to it, but the initial idea (and people involved) I liked.

[arch_8ngel | 1,597]

Just now, Bronty said:

I don't know.   Risky venture.   Limited upside.  IMO. 

But, as I said, I have no real knowledge of it.

Let's say you had 500k to invest pre wata.    Would you have done better by buying 500k worth of games?   Or by investing 500k in wata?

I'm guessing you would have already tripled your money if you did the former.   And you're probably five years away from getting paid back if you did the latter.

It would be more than a back-of-the-envelope guess here to figure out whether Wata looked like a "good idea" long-term, versus just flipping merchandise.

But it wouldn't surprise me if their end-game is to attempt to be acquired by a larger/broader service.

 

(Though personally, I wouldn't dump $500k into either option, in favor of more traditional investments )

[Bronty | 187]

1 minute ago, arch_8ngel said:

It would be more than a back-of-the-envelope guess here to figure out whether Wata looked like a "good idea" long-term, versus just flipping merchandise.

But it wouldn't surprise me if their end-game is to attempt to be acquired by a larger/broader service.

I didn't get that impression, that Deniz was thinking of that, but I'm with you.    I think his own best shot at making a lot of money is to have heritage buy his grading company one day.

[arch_8ngel | 1,597]

1 minute ago, Bronty said:

I didn't get that impression, that Deniz was thinking of that, but I'm with you.    I think his own best shot at making a lot of money is to have heritage buy his grading company one day.

Or the two companies together make enough noise to get gobbled up by the real big fish (CLCT) with the ability to do equity-based buyouts.

[MinusWorlds | 193]

Because nobody could be bothered to ask Deniz or Kenneth about the Jaws, I did. Here’s the explanation:

LJN had overstock of a lot of games. They would seal them in-house. The President of LJN sold some of those games. Deniz then did the due diligence to verify this through emails provided etc. The determination was they were legitimate seals done at LJN based on the evidence provided and their own fact-finding. A discussion was had internally and they decided to label the games as “third-party seals”. That’s it. 

So since we’re just bashing grading companies any chance someone wants to do some legwork to explain these to me? I mean I did the Jaws homework.

Altered Beast 90 - SWEET Baby! Oh wait a second here is that a white edge along the top signifying a photocopy? Legit covers don’t have that. And is that scratches coming through onto the photocopy from the original? Oh look at that a nice blue Altered Beast, maybe that’s a cool variant, wait, nope, that’s just bad ink from a shitty copier that couldn’t process/copy the black ink correctly.

Castlevania Q85+ - Wowzers! I mean a “brand new” Castlevania hangtab. SICK!!!!! Hold up, Are those inserts correct? Aren’t those inserts from like 88?? But HT CV came out in 87? Well, that’s odd. Seems to be missing the correct 87’ inserts too. Annnnd wait a minute, is that a manual for a PAL Pilots Wings for N64?!? Oh it sure is. How did THAT get in there? Strange indeed. I mean Q games are brand new, never opened, no exceptions right?

Here’s the deal, grading companies are still humans, mistakes are made. The bias towards one or the other is real too. What I don’t appreciate and find troubling is people that repeatedly bash Wata, make snide comments, post passive aggressive comments and then break bread with them and sell their graded games for massive profit. All the while not making a peep about their competitors errors. When they know full well about some of the ones I’ve mentoned. Or sit in silence when I say Q games are a sham, when they know full well I’m telling the truth. 

I care about consistency, legitimacy, and being able to identify fakes. Wata is without any question better at all of those. That’s what I care about with any grading company. 

Edited November 8, 2019 by MinusWorlds

[arch_8ngel | 1,597]

@MinusWorlds  I really don't think anyone here is saying that Wata isn't a superior service to VGA, or that VGA is without its own controversy.

 

But the bulk of this discussion isn't really about errors in grading.

It is about errors in judgment of who is involved in what way.

Edited November 8, 2019 by arch_8ngel

[MinusWorlds | 193]

14 minutes ago, arch_8ngel said:

@MinusWorlds  I really don't think anyone here is saying that Wata isn't a superior service to VGA, or that VGA is without its own controversy.

Plenty of people have that mindset, and that’s okay. It’s okay to prefer VGA. But, when you make it your personal crusade to bring Wata down or bad mouth them at every turn the comparisons need to come up, even if just to highlight and remind people of the benefits Wata brings to the table. 

Guys/Girls - At the end of the day Wata is Deniz and Kenneth. These are our friends. We’ve known them for a decade. I’m sure some of you even helped change Deniz’ diapers (just kidding Deniz, you know I love you). We have joked, shared, and grew a community together. They made Wata out of a desire to advance the hobby they love as much as we do. Why are we so quick to try and tear them down?

Yes the hobby has changed, yes it feels like a business at times, but we all helped get it here. Every one of us. This community started here, we’re all responsible for where we are. I said it before, but I’ll repeat it because I think it’s worth saying again. Without all of us and new collectors coming in over the years this hobby could have died a long time ago. I don’t think any of us want that.

Edited November 8, 2019 by MinusWorlds

[arch_8ngel | 1,597]

4 minutes ago, MinusWorlds said:

Guys/Girls - At the end of the day Wata is Deniz and Kenneth. These are our friends. We’ve known them for a decade. I’m sure some of you even helped change Deniz’ diapers (just kidding Deniz, you know I love you). We have joked, shared, and grew a community together. They made Wata out of a desire to advance the hobby they love as much as we do. Why are we so quick to try and tear them down?

My impression of this discussion was that it was more about seeking truth/clarity/transparency, though I certainly don't speak for anyone else in that regard.

It doesn't strike me as an arbitrary "tearing down", rather a seeking to understand all of the players that are involved as well as the extent of their involvement in order to be able to make a more objective judgment of the value of the service.

 

You seem to be forgetting how merciless the discussions about VGA were...this is pretty tame by comparison, presumably because of Deniz/Kenneth getting a greater benefit of doubt than was afforded the guy behind VGA.

[Sign Collector Guy | 334]

1 hour ago, doner24 said:

I don’t have an opinion because I only deal in ungraded cards. I like opening boxes and acting like I’m 10 again, and I fund it by speculating on prospects that I think are due for spikes. 

We had a baseball card shop down the street from me a guy ran out his garage which we all know was rampant and awesome in the 90's. This show I watched recently on Netflix was pretty awesome that focused how the Griffey Jr. Upper Deck rookie blew the scene wide open. https://www.netflix.com/title/81151313 It was confirmed Upper Deck reprinted the card later like printing money. A guy in the show has the original Griffey picture they took for the card. I proudly display my PSA Graded Griffey Jr. rookie with my game collection.  

Edited November 8, 2019 by Sign Collector Guy
Typos

[guitarzombie | 924]

11 minutes ago, MinusWorlds said:

Without all of us and new collectors coming in over the years this hobby could have died a long time ago. I don’t think any of us want that.

I do!  Prices would go down   JK.

[MinusWorlds | 193]

1 minute ago, arch_8ngel said:

My impression of this discussion was that it was more about seeking truth/clarity/transparency, though I certainly don't speak for anyone else in that regard.

It doesn't strike me as an arbitrary "tearing down", rather a seeking to understand all of the players that are involved as well as the extent of their involvement in order to be able to make a more objective judgment of the value of the service.

 

You seem to be forgetting how merciless the discussions about VGA were...this is pretty tame by comparison, presumably because of Deniz/Kenneth getting a greater benefit of doubt than was afforded the guy behind VGA.

Yeah I suppose you’re right about VGA. They did take a thumping. 

My point is we know Deniz and Kenneth. Do you honestly think they would do anything shady? I don’t. I think the appearances of conflicts of interest are exaggerated. I think some of this was avoidable while other aspects were not. At the end of the day I believe they only care about bettering and advancing the hobby. 

[CodysGameRoom | 2,008]

Just now, MinusWorlds said:

My point is we know Deniz and Kenneth.

To be fair, YOU know Deniz and Kenneth. Some of you do.  A lot of us don't. Why should anyone who doesn't know them, or you, take your word, about their intentions?

I don't care either way, I'm just pointing this out.