DonMacGregor
Sub Leader
- Joined
- May 13, 2021
- Messages
- 6,436
This is a point that isn't stated often enough. DVD doesn't need to bid on contracts to move prices up. A seller, while having zero guarantee of success, is at least strongly motivated to list at or above the "current" ROFR level. If Disney is ROFR'ing ABC Villas at $150 per point, what seller in their right mind would offer a contract at $120 or $130 PP just to have it ROFR'ed, knowing it had a very good chance of also being taken had they offered at $140 or $145? No one is going to risk leaving money on the table, with Disney in play as a possible buyer. As a seller, you're going to, at the VERY least, list a contract at or above the current ROFR level to maximize profit either through a successful sale, or DVD snatching it up. If Disney starts buying back ABC Villas at $160, a seller would be foolish to list at anything lower than that, and on and on.Seller has the incentive know what it is so they can maximize their price sold. Why would you sell for well below current ROFR rates for similar contracts? On the flip side as a buyer you can either gamble and hope your contract passes below the ROFR or you can try to bid around it or slightly higher hoping for a pass.
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