Forbes: LeBron Can Purchase Part of Knicks

[Magilla_Gorilla]

Thanks to the people who actually know what they are talking about for setting the over eager fans straight.

Except would you take advice from Forbes or RealGM posters. I don't know anything about the market but this is an easy choice here.

Forbes mustve done good research before reporting this. They are one of the more trusted groups right? They mustve thought of every possible way this isnt true and refuted it.

From what I saw, the Forbes report said he could be a shareholder in MSG. He can. He can also make money in the long run.

Look at William Shatner. He took stock instead of money for priceline and over 10 years he made 600 million dollars.

The refuting comes from people who think he could flip 100 million dollar investment and or trade on his signing.

It would have to be a long term set up, that would rely on his overall success and in addition to the success of MSG as a company. Considering MSG is more then just the Knicks.

He would have the ability to be a shareholder and grow his wealth ( with his contract) . Not dup shareholders to double his money.

Thats what I was talking about - thanks. You've got people on here who think Lebron could take half of his net worth, buy MSG stock, and double it in a matter of days. Sorry Knicks fans - but it isn't happening.

[Magilla_Gorilla]

I'm not even going to pretend like I know enough about the law. However, if LeBron is within legal limits to buy MSG stock, I really cannot see how he would pass up on that opportunity. LeBron and his team will hire the most expensive lawyer, and probably even get in contact with SEC representatives and whoever else they need to get in contact with to make sure this is within the legal bounds. If it is, LeBron to NY in 2010. And you can take that all the way to the bank.

Of course he could - or he could take those same dollars and hand them off to a respected investment firm and make similar money. All while playing on a better basketball team.

[Gus McCrae]

Lebron knowing that his signing is goign to inflate the stock price and purchasing prior to his announcement is absolutely insider trading because he knows that his action, undisclosed to the PUBLIC, will affect the price.


It's the same as a an executive for Apple, knowing they're about to purchase Yahoo for example, going out and buying a bunch of shares before it's announced. That is called insider trading. Conversely selling your shares before announcing a bad quarter or some type of negative news that is no public is also insider trading.


If Lebron wants to announce he's going to the knicks, then buy stock after, it would be a little different. However, I have no idea how much of the stock for MSG is derived from Knicks value. But if Lebron is worth $150 million to a franchise, you can divide that by the # of outstanding shares and that's how much he's increasing the individual stocks.

Lastly, I don't expect this stock to jump through the roof by him signing. I do expect it to jump by random NBA fans thinking they're super smart and buying MSG stock which will increase the demand. But I don't think this is the get rich quick scheme some people are drooling over.

[panthermark]

Lebron knowing that his signing is goign to inflate the stock price and purchasing prior to his announcement is absolutely insider trading because he knows that his action, undisclosed to the PUBLIC, will affect the price.


It's the same as a an executive for Apple, knowing they're about to purchase Yahoo for example, going out and buying a bunch of shares before it's announced. That is called insider trading. Conversely selling your shares before announcing a bad quarter or some type of negative news that is no public is also insider trading.


If Lebron wants to announce he's going to the knicks, then buy stock after, it would be a little different. However, I have no idea how much of the stock for MSG is derived from Knicks value. But if Lebron is worth $150 million to a franchise, you can divide that by the # of outstanding shares and that's how much he's increasing the individual stocks.

Lastly, I don't expect this stock to jump through the roof by him signing. I do expect it to jump by random NBA fans thinking they're super smart and buying MSG stock which will increase the demand. But I don't think this is the get rich quick scheme some people are drooling over.

Nice...

This is what I said a few posts up....and back on the Bulls board I even added an example about Bill Gates going to another company...but buying stock in that company first (and before it is made public).

Basically...if Bron signs...he can wait a few days, then buy stocks in MSG...but at the point...the market would have alreeady reacted. Also, with a new CBA looming....if he is forced to sell his stocks in a year...he may not make much money at all.

[I am Ra]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract. Its very very likely to get one but as long as there is no offer, he cannot be considered an insider.

Also if he signs he may not get double his money but it will help for the amount that he will lose during free agency.

[BubbaTee]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract.

Not sure if serious

[I am Ra]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract.

Not sure if serious

He cannot have a verbal or written or any guarantee until July 1st. Thats when free agent talks begin.

[Magilla_Gorilla]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract. Its very very likely to get one but as long as there is no offer, he cannot be considered an insider.

Yeah - that will really hold up in court. He is the Insider information - he makes the decision.

Also if he signs he may not get double his money but it will help for the amount that he will lose during free agency.

Yes, just as any sound long-term investment would.

[I am Ra]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract. Its very very likely to get one but as long as there is no offer, he cannot be considered an insider.

Yeah - that will really hold up in court. He is the Insider information - he makes the decision.

Also if he signs he may not get double his money but it will help for the amount that he will lose during free agency.

Yes, just as any sound long-term investment would.

Why not? If Brian Scalabrine bought stock of the Knicks does he have a guarantee that he is a Knick. Cannot discriminate based on skill. No one can even have talks until July 1st so unless theres concrete proof that the Knicks talked to LeBron about joining the Knicks I dont see how it doesnt work.

This is basically investing in yourself and making more money than you would have in Cleveland, here in NY.

[panthermark]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract. Its very very likely to get one but as long as there is no offer, he cannot be considered an insider.

Also if he signs he may not get double his money but it will help for the amount that he will lose during free agency.

Are you serious? Do you think that the SEC would actually fall for that? He wasn't offered a contract...yet?!?!? You don't think it is public knowledge that NY wants James? Hell, even the mayor wants James....LOL!

He can purchase stocks in MSG....he'll just have to wait until AFTER the official announcement is made before he can purchase his own shares. (That goes for friends and family too). Buying at $22 and having it shoot through the roof July 1st is awesome.

But having to wait a few days into July and buying at $33 after everyone else got in on the ground floor isn't quite as attractive.

He may also have to turn around and sell them in a year under a new CBA if/when this loophole is closed.

[BR0D1E86]

Why not? If Brian Scalabrine bought stock of the Knicks does he have a guarantee that he is a Knick. Cannot discriminate based on skill.

Of course you can, because that’s the whole point of the discussion. If Lebron James was a bench rider his actions would not be expected to change the value of the stock in any way so there’s no benefit to be gained.

That’s like you saying that me knowing that Apple is about to offer me a job and me buying stock in anticipation is no different than Bill Gates knowing he’s about to jump to Apple and buying stock in anticipation.

[Gus McCrae]

Why not? If Brian Scalabrine bought stock of the Knicks does he have a guarantee that he is a Knick. Cannot discriminate based on skill. No one can even have talks until July 1st so unless theres concrete proof that the Knicks talked to LeBron about joining the Knicks I dont see how it doesnt work.

This is basically investing in yourself and making more money than you would have in Cleveland, here in NY.

1) Lebron has been informally offered a contract by the Knicks, even the mayor has acknowledged Lebron coming to NY. Everybody and their mother knows an offer is on the table.

2) you CAN discriminate based on skill; again, if a large company, we'll use Google as an example, buys out a local 5 person service provider (brian scalbrine) it has little to no effect on the value of the stock. If they buy out AT&T (Lebron James) it has a major effect because it changes the whole dynamic of the company (the knicks).

As for all this "informal offer so it's not illegal" type of talk, you have to understand, the market is what drives our economy. The SEC and govt. don't fk around when it comes to skating around the rules of insider trading. One company gets away with it, consumer's lose faith in the market, stock crash. Lebron to the knicks is a blip on the radar of of the market but if he is allowed to purchase stock before inflating the stock knowingly, there would be an article on the front page of the Wall St. Journal and NBA have all sorts of unwanted attention.

[panthermark]

Why not? If Brian Scalabrine bought stock of the Knicks does he have a guarantee that he is a Knick. Cannot discriminate based on skill. No one can even have talks until July 1st so unless theres concrete proof that the Knicks talked to LeBron about joining the Knicks I dont see how it doesnt work.

This is basically investing in yourself and making more money than you would have in Cleveland, here in NY.

You just made that line up.

If Bill Gates leaves MS, and is thinking about taking a job as the new CEO of a smalll tech compamy that is already on the NYSE....Gates can't go buy stock in the company while he thinks about taking the job. Take the same job offer....and replace with some unknown bum....and no one really cares. (But comapnies still try to avoid any type of insider trading by having it's own EE's wait on stock transactions).

The skill level and name recognition of Gates alone will inflate the stock price.

If Bill is offered stock as part of his compensation...that is a different story....but MSG can't offer Bron stocks.

[DowJones]

Let me just ask this:

How is LeBron an insider if he buys stock now and signs come July 8th? He does not have a guarantee that the Knicks would offer him a contract. Its very very likely to get one but as long as there is no offer, he cannot be considered an insider.

Also if he signs he may not get double his money but it will help for the amount that he will lose during free agency.

Ok...even if SEC and the NBA CBA allows it, LeBron has to fully disclose his intentions to buy a large number of shares to the public before he actually does it. Guess what happens then....the price of that stock goes up as everyone assumes he will sign with the Knicks. That means that Mr. James can not take advantage of whatever bump that the company stock will see.

LeBron can't just sneak in the back-door, buy a bunch of stock, and then get the reward when he signs there a few months later.

[LLcoleJ]

All of the SEC , insider trading stuff is legit. But let's put that aside for a moment.

Do you know how many shares Lebron would have to buy @ $22.00 on the open market to make a serious amount of cash here?

It would be an astronomical amount that would actually saturate and possibly decrease the value of the stock.It would be shorted, saturated, possibly halted and in the end near impossible to double your money. You would be lucky to make 5%-10% then take into account capital gains taxes.

And at the end of the day.. ( yes putting aside the SEC/insider trading accusations) He would be taking regular peoples money and not being a shareholder/owner.

[Doo Doo_Brown]

Ok...even if SEC and the NBA CBA allows it, LeBron has to fully disclose his intentions to buy a large number of shares to the public before he actually does it. Guess what happens then....the price of that stock goes up as everyone assumes he will sign with the Knicks. That means that Mr. James can not take advantage of whatever bump that the company stock will see.

LeBron can't just sneak in the back-door, buy a bunch of stock, and then get the reward when he signs there a few months later.

It's still insider trading. Why else would he all of a sudden buy a huge number of shares? He's using using information not available to other investors to make a profit on his stock investment, which is illegal.

[Childs2Dudley]

You people realized this was written in a business magazine, right? A very famous one. Don't you think they'd know about insider training and all this mumbo jumbo before floating this possibility? C'mon now.

[LLcoleJ]

You people realized this was written in a business magazine, right? A very famous one. Don't you think they'd know about insider training and all this mumbo jumbo before floating this possibility? C'mon now.

Again.

Lebron buying stocks in MSG, that in the long run will make him money, like any sound long term investment is not the topic that seems to being discussed here.

It's the idea that he will grab a large amount of shares, sign with the Knicks, inflate the stock and sell. That is the issue.

[Childs2Dudley]

Shares of Madison Square Garden Inc., [MSG 21.50 -0.39 (-1.78%) ] the publicly traded owner of the New York Knicks, are up 12 percent since the Boston Celtics began their three-game win streak that knocked the LeBron James-led Cleveland Cavaliers out of the NBA playoffs.

“Investors are hoping that James chooses to come to New York to improve the profitability of the Knicks (ticket sales/suite sales/merchandising/MSG Network ratings, etc.)” wrote Richard Greenfield, media analyst for BTIG, in a note to clients this afternoon. (Click here to see Greenfield’s blog ) “And to help drive the return on investment of the Garden rebuild project.”

MSG shares pulled back a bit today, which may be related to the increase in Vegas odds of the Chicago Bulls’ chances of landing James when he becomes a free agent in July. The Cavaliers are still the favorites to sign him at 8-11, according to online gambling site Bodog.com, but the once-time dark horse Chicago Bulls are now second at 2-1, ahead of the Knicks third with 5-2 odds. At the start of the month, Knicks were the clear second favorite.

http://www.cnbc.com/id/37156496?

[Reservoirdawgs]

All of the SEC , insider trading stuff is legit. But let's put that aside for a moment.

Do you know how many shares Lebron would have to buy @ $22.00 on the open market to make a serious amount of cash here?

It would be an astronomical amount that would actually saturate and possibly decrease the value of the stock.It would be shorted, saturated, possibly halted and in the end near impossible to double your money. You would be lucky to make 5%-10% then take into account capital gains taxes.

And at the end of the day.. ( yes putting aside the SEC/insider trading accusations) He would be taking regular peoples money and not being a shareholder/owner.

^^^^^^^

The idea that he is going to become absolutely wealthy by investing in MSG stock just because he will be there is pretty comical. He will not be making up any of the $30 million he could make by staying in Cleveland because the amount of shares, taxes, and length he would have to wait to make it worth it just is not worth it.