By John Thier on Dec 28, 2009 3:36 pm - 1,325 views
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Kees Visser, the owner of Moorlands Totilas has suggested that he would sell the stallion for 20-25 million Euros after Totilas broke the freestyle World record earlier this month.
“Answering queries that he had rejected â‚¬15million during Olympia, property magnate Visser said: “You can’t say he’s not for sale. Never say never. If you say â‚¬15 million, then maybe â‚¬20 or â‚¬25 million would be the price.
“I don’t have any anxiety or fear as to what can go wrong. Otherwise I would sell him right away.”
My take: Obviously, an asking price does not represent the market value of any asset. For example, I can say that I would sell my car for $10 million, but that means nothing in terms of truly valuing the vehicle. A market value for my car, or anything else is only established when someone agrees to pay the asking price. However, the fact that Totilas can produce revenue as a stallion supports a very high asking price.
The value of a stallion such as Totilas is basically based on the value of the enjoyment the owner derives from watching it win plus the discounted value of anticipated future cash inflows from breeding, minus the discounted value of future cash outflows.
For a bit of perspective, racehorse two-year-olds have sold at public auction for around $16 million, and rumors of private sales of proven winners have exceeded $50 million. In terms of breeding, racehorse stallions typically cover between 75 and 115 mares a year. AP Indy, one of the most expensive stallions in the World, currently stands for around $300,000 per live foal.
Prices this high for horses in our (eventing) world are unheard of, partially because most top sport horses are geldings, although I have heard rumors of several event horses, even geldings, selling for several million dollars. But hey, if you have $50 million to throw around, why not spend it on something this impressive? Go eventing.