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Congrats to Rick Montgomery and NGC

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PCGS News Release:

 

PCGS announced today that long-time PCGS grading expert Ron Howard was named Director of Grading. PCGS also announced that Rick Montgomery has resigned as President of PCGS. Ron Howard will assume Montgomery's responsibilities of overseeing the final quality of all coins graded by PCGS.

 

"Ron Howard is a world class grading talent and has been one of our senior graders for the last 16 years," said David Hall, PCGS founder and Collectors Universe President. Hall continued, "We all have a great deal of confidence not only in Ron Howard's grading ability, but the grading ability of the entire PCGS grading team. Ron and our other PCGS senior graders will make sure the quality of PCGS grading will remain the industry standard."

 

Mark: Without destroying any chance of receiving an upgrade in the near future wink.gif can you give us a read on whether this is a good move on PCGS' part or not?

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TDN - I worked with Ron Howard at Heritage in the early 80's. I respected his numismatic knowledge and abilities back then and expect that he is more than capable of serving as a finalizer now. To me, this move makes more sense than would hiring someone new. And, while I don't know what other options, if any, PCGS considered, it seems like a good option. This is not a comment in any way, about anyone else at PCGS who might have considered for the position, if indeed anyone else even was.

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An excerpt from David Hall's post on the forum:

 

Note to all...we don't use a finalizer. We have a system of verification and "double verification." Ron will grade, do the second decision on any proposed verification changes, do cross-over verifications, and do all the double verifications.

 

Mark: can you explain what he means in plain english for us poor engineers?

 

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So I saw the David Hall post on the other side, but no mention of Rick joining NGC, has this been verified, or is it speculation on our part?

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Yes, I saw the press release, and it just said Rick left and Ronnie Howard is taking over for him. Nice how they buried it on the PCGS site with no mention of it on the CU Investor Relations page...

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You are correct, but most of the companies I cover list the press releases relating to their subsidiaries on their IR page, as it is often information shareholders would want to know. Nothing illegal about what they did, just bad IR in my opinion (it also shows again the value of us analysts digging around on the companies we follow, though I do not cover CLCT nor do I own any shares in the company).

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Welcome back to the board Mark. I read Hall's post on CU, he is now up to 7 posts by the way. After I got through all the ring kissing over there and reread his message a couple of times, I still am not sure what he did or didn't say.

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My overall impression is they're not exactly sure what to write and what not to.

At least there was some kind of announcement. With all the Baltimore talk going around, that was the minimum they needed to do.

 

I'm not sure they're at the "damage control" level yet though.

I bet PCGS will bounce back and who knows? As NGC grows in strength due to hireing a competent and knowledgeable leader, PCGS may regroup and come back stronger too due to this loss.

I hope it works out well for both companies because in the end PCGS needs NGC and NGC needs PCGS.

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Well, one thing is for sure. If Rick left for a direct competitor, there would have to be either compensation on someone's part or close scrutiny for a while because it would be easy for him to reveal trade secrets or internal insider information. I would be surprised if there is not some sort of non-compete signed while he was at PCGS. I wonder how the legal side will end up?

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At least there was some kind of announcement. With all the Baltimore talk going around, that was the minimum they needed to do.

 

I'm not sure they're at the "damage control" level yet though.

 

The announcement was more to steal any thunder that NGC would have had with their announcement. Besides, the rumbling of something big at PCGS have been going on for quite some time. After it was semi-well known that Rick was gone, they had to say something.

 

My prediction on the next big announcement: Q. David Bowers is "retiring".

 

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I would be surprised if there is not some sort of non-compete signed while he was at PCGS. I wonder how the legal side will end up?

 

Non-compete clauses are hard to enforce. Rick moved 3000 miles away to work for a competitor. I doubt you could find a court to enforce a non-compete clause over this distance. In fact, I believe that some states actually have laws defining how far (miles) that a non-compete clause can be in effect for.

 

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Sounds like PhsycoscoBabble to me. But being an Engineer and not a Marketing Person, I never understand what they (Marketing People) are saying anyhow. tongue.gif

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Non-Compete's in California are a waste of time and money. The courts here have ruled, time after time, that you can not infringe on a person's ability to work in their chosen career field, competitive or not. You can however legally protect your Intellectual Property from ex-employees using it to directly cause harm to your business.

 

I am not a lawyer, certainly, but I have some experience in this area. tongue.gif

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