A first: racing partnership(s) as public traded stock

[Glimmerglass]

This would be a first and comes from the Austrian/Canadian industrialist who seemingly rarely ever loses any money, although the same cannot be said for his partners While there are a slew (no pun intended) of racing partnerships from West Point Thoroughbreds to Sakatoga Stables and even the infamous IEAH, all of them are private without shares openly traded on an exchange. Nor are those groups subject to the rules of the Securities and Exchange Commission (SEC) as these will be.

DRF Jan 4, 2012 “Stronach forms six racing companies for public offering” - excerpt

Frank Stronach has created six racing-stable companies that will sell shares to the public for $10 a share, according to documents filed in December with the Securities and Exchange Commission.

The development follows a spending spree by Stronach at the 2011 yearling sales, and it appears that at least some of those purchases could point for the new racing stables. Stronach is seeking initial public offerings for all six corporations, each of which will offer 405,000 shares and own 20 horses that were purchased as yearlings in 2011 and turned 2 on Jan. 1.

The corporations are named after six of Stronach’s most successful horses: Awesome Again Racing Corporation, Red Bullet Racing Corporation, Ghostzapper Racing Corporation, Perfect Sting Racing Corporation, Ginger Punch Racing Corporation, and Macho Uno Racing Corporation.

It’s an interesting suggestion with a company having 20-horses and maybe with a few stakes wins there could be some interesting upside with syndicating the breeding rights. Although the routine costs appear to be not unlike the private partnerships with some hefty operating fees.

Each 90-day IPO could raise $4,050,000 for each company. A portion of the offering’s net proceeds – $1,235,966 – will repay Alpen House Racing, a wholly owned subsidiary of The Stronach Group that also operates Stronach’s Adena Springs Farms, for the horses’ purchase prices. The companies’ prospectuses also anticipate spending about $1.5 million for total operating expenses, including about $1.15 million for administrative and IPO-related expenses and $1.1 million for training and maintenance expenses, payable to Golden Pegasus.

Golden Pegasus “will provide training and maintenance services and will supervise all aspects of the training and racing development of the company’s horses,” according to the filings, for a $150 per-day fee for active horses in training and a $50 fee per day for retired horses “whether of not they are being retrained for purposes other than racing.”

You can review the SEC filings here:

The primary firm’s SEC S-1 registration statement with Awesome Again Racing Corporation: is found here via Edgar OnLine

Each horse under the respective partnership is listed, purchase price as well, etc. … e.g, with Horse #16, a filly purchased for $25k

Bloodline Information: 5/10/10 by Fairbanks out of So Smashing, by Two Punch. This filly is a daughter of Fairbanks, Black-type winner of 6 races, $879,768, including the Grade 2 Hawthorne Gold Cup. He is a son of Horse of the Year, Giants Causeway. Fairbanks first foals are yearlings of 2011. So Smashing, dam of this filly, was a winner at 3 and earned $10,200. She is the dam of 4 foals to race, all winners, including Twelve Pack Shelly, a winner of 4 of 8 starts at two including the Miss Shenandoah and Colleen Stakes and $192,300. This Registered Pennsylvania Bred Filly is nominated to the Breeders’ Cup.

The other company filings with the SEC:

Ghostzapper Racing Corp

Ginger Punch Racing Corp

Macho Uno Racing Corp

Perfect Sting Racing Corp

Red Bullet Racing Corp

[Acertainsmile]

I would love to comment, but because of business relations I cannot at this time…

[regancmatus]

So, have the filings been approved and when will the public offering be???

regancmatus

[merrygoround]

I do believe something similar was out there 25 years ago hyped by the owner (shortly after ) of Garden state Race Track. I remember :lol: at the young man trying to sell me shares.

I just can’t remember his name! Dig it up Glimmer!

[Lord_Helpus]

I sure hope the shareholders do not expect seats at the Derby and a place in the winner’s circle. :rolleyes:

Seriously, Stronach stands to make good money. He has companies which handle every aspect of this and get paid well for it.

And $150/day training and $50 retirement?

O come now. I get $22/day board ($650/month) and that covers a stall with bedding and turnout and feed (although I only break even by not “paying myself” for my labor). So Stronach is doubling the cost of keeping a horse.

And, don’t we guess that the horses he assigns to the publicly traded companies will be the culls from all his purchases?

There is a reason Stronach is as rich as he is — and it is not because he gives money away.

– Or could I just be too cynical?

[Acertainsmile]

[QUOTE=merrygoround;6160194]
I do believe something similar was out there 25 years ago hyped by the owner (shortly after ) of Garden state Race Track. I remember :lol: at the young man trying to sell me shares.

I just can’t remember his name! Dig it up Glimmer![/QUOTE]

Robert Brennan

[Glimmerglass]

[QUOTE=Acertainsmile;6160255]
Robert Brennan[/QUOTE]

Ah, yes, good old REB, who was released from Fort Dix (NJ) Federal Prison Jan 7, 2011. Although he was a master of the pump-and-dump scheme with penny stocks, hyped by brokers in on the deal, I don’t believe he ever successfully offered something like this.

His 2003 sentence document - from the Department of Justice (pdf)

Despite forfeiture of $75M in ill gotten assets the Feds have still been trying to recover millions hidden away in off shore accounts in assorted trusts. They have been for the last year looking into reopening his old bankruptcy case.

It was that bankruptcy which resulted in the loss of his Due Process Farm which was then acquired by Gary Biszantz (Cobra Golf) and renamed Cobra Farm in Lexington, KY among other farm locations he lost.

[Acertainsmile]

There was also a Due Process Farm in NJ…If I remember correctly Julie Krone owned it for awhile.

[WhiteCamry]

@Glimmerglass;6062076

This would be a first and comes from the Austrian/Canadian industrialist who seemingly rarely ever loses any money, although the same cannot be said for his partners While there are a slew (no pun intended) of racing partnerships from West Point Thoroughbreds to Sakatoga Stables and even the infamous IEAH, all of them are private without shares openly traded on an exchange. Nor are those groups subject to the rules of the Securities and Exchange Commission (SEC) as these will be.

DRF Jan 4, 2012 “Stronach forms six racing companies for public offering” - excerpt

…

Each horse under the respective partnership is listed, purchase price as well, etc. … e.g, with Horse #16, a filly purchased for $25k

…

The other company filings with the SEC:

Ghostzapper Racing Corp

Ginger Punch Racing Corp

Macho Uno Racing Corp

Perfect Sting Racing Corp

Red Bullet Racing Corp

Will each corporation have its own silks?

[Ravencrest_Camp]

[QUOTE=Lord Helpus;6160215]
I sure hope the shareholders do not expect seats at the Derby and a place in the winner’s circle. :rolleyes:

Seriously, Stronach stands to make good money. He has companies which handle every aspect of this and get paid well for it.

And $150/day training and $50 retirement?

O come now. I get $22/day board ($650/month) and that covers a stall with bedding and turnout and feed (although I only break even by not “paying myself” for my labor). So Stronach is doubling the cost of keeping a horse.

And, don’t we guess that the horses he assigns to the publicly traded companies will be the culls from all his purchases?

There is a reason Stronach is as rich as he is — and it is not because he gives money away.

– Or could I just be too cynical?[/QUOTE]

No you are not too cynical. Stronach stands to make money from this, the shareholders, not so much.

This is the same guy who managed to have 50% control of Magna with just 5% equity. :eek:

[gumtree]

This was covered and debated extensively in the Paulick Report last month for those who would like to read several hundred comments

[Glimmerglass]

And what became of this plan?

Wall Street Journal (7-27-12): "A ‘Neigh’ to Thoroughbred IPOs " - excerpt

[Frank Stronach’s] vision to launch a set of initial public offerings that would allow everyday fans to back thoroughbreds never got out of the gate. The racing-business veteran recently pulled the plug on the plan, six months after filing papers with the Securities and Exchange Commission. His company cited tough markets in scrapping the deal.

“We got feedback, and we understand how the market conditions are,” said Mike Pilmer, executive vice president of Stronach Group, which organized the offering. “We’ve taken time to digest that feedback and have assessed alternatives from a financing perspective.”

Instead, Mr. Stronach will launch the companies as private limited partnerships, Mr. Pilmer said.

The public listings were intended to help repay debt used to buy the horses, as well as pay for training and upkeep. In turn, shareholders who invested in the companies would share in any cash from purse winnings and, later, the sales of the horses in each group.

If they shined on the track, the horses, now all two years old, could have qualified to enter next year’s Triple Crown races. Last May, the Kentucky Derby spread a purse of $2.2 million among its top finishers. But the chances of glory are slim; as the IPO prospectuses warned, the most-frequent outcome of ownership in a racehorse is “partial or total loss of invested capital.”

[CVPeg]

[QUOTE=Glimmerglass;6062076]
This would be a first and comes from the Austrian/Canadian industrialist who seemingly rarely ever loses any money, although the same cannot be said for his partners While there are a slew (no pun intended) of racing partnerships from West Point Thoroughbreds to Sakatoga Stables and even the infamous IEAH, all of them are private without shares openly traded on an exchange. Nor are those groups subject to the rules of the Securities and Exchange Commission (SEC) as these will be.[/QUOTE]

Maybe not the SEC, but in trying to mull over putting together a racing LLC, I’ve found that several have gotten into trouble with various states’ trading regulations, including some nefarious back and forth tattling on each other. This would apply to some of the smaller groups. I’d expect that the larger ones have the finances to use good attorneys who will have all the appropriate filings done.

It’s becoming prohibitive deciding to put one together, considering the above. I don’t know how some of the little ones can keep on racing, unless they’re breaking several regulations. Cross a state line in marketing, or have someone invest from out-of-state, and you can get in plenty of hot water. Or be the target of those who wish to see your demise if you haven’t invested in a whole lot of legal fees first.

And I would love it, if anyone can give me specifics while I continue to explore this LLC, what you might have come across in this regard. Have had the training connections and other things in place, but this isn’t going to be one of those “you, too, can get in for $250”. Will have different goals, but also plan on doing it “by the book”. Not looking for legal advice, have one working on it, but maybe reference material?