Business Studies Course - Investment
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Financial news report - Functions

Sally is discussing some of Ivan's proposed investments with him. Decide how Sally feels about the football club, how Ivan reacts to this, and the relationship between Sally and Ivan at the end of the conversation. When you have decided click on 'ANALYSIS'.

Sally: "A football club? You want to buy into a football club?"

Ivan: "Well, yes, I am considering it, in fact."

Sally: "Well, it's your portfolio, but you are going to have to come up with some good reasons for the boss."

Ivan: "Oh, I have them."

Sally: "Yes, go on."

Ivan: "Oh, do you want to know too?"

Sally: "Yes, ok, I admit it. I want to know why you are buying into a football club. I mean, supporter interest always means that they are overpriced, and there is never any dividend to speak of. How do you intend to make a profit?"

Ivan: "I'll be honest with you - this is a bit of a gamble. But look at it like this. No-one in the city looks at football clubs, because they are bad value, right? But this club is coming out with a big share issue, even if they are doing it in two tranches, and the supporters are going to strain to buy it all up - that will keep the price down."

Sally: "Maybe that is where it deserves to be."

Ivan: "Ah, but this club have got Fettuchini playing as striker, and their first fixtures of the season are all against weak opposition. They might well be in the top ten for several weeks - then the share price will take off."

Sally: "Well, you seem to have it all thought out. I must admit it is not something I would have thought of, but that's why you are here, to give some fresh thinking."

Ivan: "As I said, it's a gamble. It could all go wrong. If it does, you can come to me and say "I told you so!"

Sally: "I might do that. But still, pass me any interesting ideas you get about my stuff, would you?"

Ivan: "If you want me to, of course."