As the FT has noted this morning:
Up to €10bn will be wiped off the value of European football players due to the coronavirus pandemic, as some of the sport's biggest clubs warn that plummeting revenues mean less cash will be spent on star signings.
I have argued that valuations are going to collapse after coronavirus, and balance sheets with them.
It looks like the process is starting.
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This shows you that the valuation process is based on the assumptions of the sun always rising, whatever.
What a way to run an economy and – more pointedly – a market.
Cloud cuckoo land – that’s what it is. Aggrandisement dressed up as objective research. Lamb dressed as lettuce.
And people’s lives made or destroyed by it.
Mostly destroyed……………………
You’d think that markets would just stop now wouldn’t you – they’d realise the context and ethically see that their ‘valuations’ don’t mean shit in this context? But no, they have to go and on and on – creating fear and panic and bringing an end to the lock down prematurely.
Ridiculous.
Not all bad news, then? As long as they don’t hold a begging bowl out to governments.
You can bet they will….
They held off furlough, but who knows as yet
…. but Charlton still won’t be able to put out a decent XI
Nor Ipswich Town….
You may find this analysis (see below) interesting re oil & gas companies and one ex-oil & gas company – now a renewable company. In the case of the former (BP & Shell) dividend cuts and reduction is capital spend, in the case of the latter, capital spend continues unchanged, ditto the dividend, share price little changed. This crisis has the potential to accelerate the energy shift – if only as some energy companies see others (renewables) sailing on with few problems.
There is also the issue of pension funds and the move from a world of 6% dividends to 1% dividends. Apologies for raising this again.
https://seekingalpha.com/article/4342952-q1-earnings-calls-show-exxon-mobil-taking-cover-whileorsted-is-flying