Virginia Football – Buy, Sell, or Hold?

If UVA football under Bronco Mendenhall was a publicly traded stock (ticker symbol BRNC), for all intents and purposes, it had its initial public offering on September 3 when UVA was thumped by FCS contender University of Richmond. This game was the equivalent of a stock that went public at $20 and finished the first trading of day at $15. It was not what anyone vested in the success of BRNC wanted to see. Many were ready to sell early and cut their losses.

Storm clouds on the horizon did little for the next two trading days. A lopsided loss in Eugene and a close but embarrassingly ugly loss in Hartford drove BRNC’s value down further. Analysts had to be wondering whether they should have kept BRNC out of the public eye and how could they have been so wrong about its prospects.

BRNC futures were trading down sharply when undefeated Central Michigan came to Charlottesville. However, those who were short BRNC took a bath as the Wahoos took down the Chippewas in convincing fashion. A second impressive win on the road at Duke rallied BRNC past its IPO price as fans started to jump back on the BRNC wagon.

As with all stocks, the biggest question looking forward is: where do we go from here? While this question tends to focus on the potential wins and losses over the coming seven games, there is more to the success of BRNC in the UVA market than winning six games in 2016 and going to a bowl game.

Bronco, assuredly, has to win games. However, UVA fans are an unusual bunch. He has to win back a weary UVA fan base. He has to replace the sense of impending doom that has surrounded the program for the past 12 years and with a sense of anticipation. Additionally, style points matter for Virginia fans. Virginia fans want to win, but they won’t accept athletes that embarrass dear old UVA. Therefore the value of BRNC with the Virginia faithful is much more complicated than the win-loss record.

This probably explains why BRNC got so far ahead of itself in its pre-IPO excitement. Bronco said and did everything that Virginia fans cherish. He was tough on his players. He spoke of earning versus giving. He spoke of discipline, focus, and speed. He had a system that had produced winners for 10 years in a row. His players stayed out of trouble and graduated on time. He was thoughtful and engaging when meeting with the donor community. Most of all, he had a track record of winning the right way. He was a CEO who had thrived in an environment at BYU that was equally as complex and demanding as UVA. It is little wonder initial expectations were inflated. It is also not a shock that over-blown expectations were quickly dashed.

However, as anyone in the financial market will tell you, there is a big difference between investing and trading. Both investors and traders were overly giddy about BRNC when it went public against Richmond. The traders started to jump ship after the first couple of losses. Most UVA fans are investors though. Over the decades they have celebrated jubilant highs and endured heart-breaking lows. Over the past couple of decades, the trend of the athletic program has been up and to the right, with football being the notable laggard.

Therefore, it is understandable that fans over-bought BRNC in the run up to the final horn on September 3. Some felt like they had been sold a bill-of-goods. However, BRNC is is not a fly-by-night. It is not BRNC is built on foundational principles that last, that win games over the long term. While the UVA fan base might be a little less patient than Bronco would like, I think they are on board for the long term.

BRNC might not be Google or Amazon in terms of it’s performance, but it’s not going to be Enron either. Hang in there UVA fans. Happy returns are not far off!

E-mail David at [email protected].


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