If Man United shares get any lower ...

[AG7]

In today's Independent by Simon English

If Man United shares get any lower, expect Glazers to grab first chance of an exit.


How low do Manchester United shares have to go before someone comes in with another takeover bid that the much (and fairly) maligned Glazer family decide offers a good chance to take the money and run?

New York outfit PrivCo says the stock is worth no more than $5 a share. That compares with a float price of $14 that only stayed at that level on the first day of trading thanks to emergency support from the brokers behind the deal.

There's still a long way to fall to meet the doomsday prediction, but funny things happen to stocks once sentiment turns defiantly against them. Companies with strong management and supportive long-term shareholders can withstand such travails. Our job is to run the business, the stock market's job is to value it, the bosses can say. We are doing a better job than it is and will prove so in time.

This doesn't apply at Man U, a business that has seen onfield success continue despite turmoil off it. No one thinks the Glazers have any interest in football or the desires of the fans. They want to make cash, and have done so.

All of which gives the club's float a Facebook feel. Its expectation of future value is based on the 660 million fans it claims across the world.
These are mostly followers in Asia that buy knock-off replica shirts and cheer on Wayne Rooney via pirate TV signals.

Like Facebook clicks on anything but advertisements, it is hard to see how this fandom turns into big dollars for Manchester United.
At $5 a share, Man U is worth about £510m, which compares with debt of towards £400m.

If that were a house, you'd say it was heading towards negative equity. That's the point at which grateful owners get out to anyone willing to take the property off their hands. Now, there are complicating issues, such as the fact that the 10 per cent of equity floated has no voting rights, which makes a bid trickier to pull off. But that's not insurmountable, especially if the seller were keen to move on...

Two years ago The Red Knights, a group of wealthy fans that includes Goldman Sachs' Jim O'Neill, weighed a bid but were put off by the price.

For the next little while, the underwriters will keep putting a floor under the shares, supporting the price to avoid embarrassment. When this period lapses it will be more than of passing interest what happens to the stock price.

The Red Knights might have one eye on it themselves.

[Alioune DVToure]

Cheers, A(G7).

[Piccsnumberoneblue]

I don't really know about these things so these are genuine questions.
But, everybody seemed to know that the shite were massively over valued and these shares appeared to not be worth a wank, so why did anybody shell out the money at the original price?
And why, when it apparently leaves the Hillbillies vulnerable to a take over, did they proceed with it for the sake of a relatively paltry seventy five million squiddlies?

[Scatman]

I don't really know about these things so these are genuine questions.
But, everybody seemed to know that the shite were massively over valued and these shares appeared to not be worth a wank, so why did anybody shell out the money at the original price?
And why, when it apparently leaves the Hillbillies vulnerable to a take over, did they proceed with it for the sake of a relatively paltry seventy five million squiddlies?

I think the answer to the second one is it doesn't. As the club is privately owned and the shares are not publicly traded, they are not vulnerable to a hostile takeover like they would be if stock exchange rules were in play.

[Scatman]

I don't really know about these things so these are genuine questions.
But, everybody seemed to know that the shite were massively over valued and these shares appeared to not be worth a wank, so why did anybody shell out the money at the original price?
And why, when it apparently leaves the Hillbillies vulnerable to a take over, did they proceed with it for the sake of a relatively paltry seventy five million squiddlies?

I think the answer to the second one is it doesn't. As the club is privately owned and the shares are not publicly traded, they are not vulnerable to a hostile takeover like they would be if stock exchange rules were in play.

[dazby]

They only sold 10% of their share in the company so even if you bought them all you'd wield 0 influence.

[Beefymcfc]

What you'll find Piccs is that it is actually the underwriters who are buying their own shares to prop the market up, a bit like the government when they bailed out the banks.

As for a takeover, that's why they had to do this in the US, so they could give little to no value with respect to voting rights. Not even a dividend will be paid.

[Nigels Tackle]

What you'll find Piccs is that it is actually the underwriters who are buying their own shares to prop the market up, a bit like the government when they bailed out the banks.

As for a takeover, that's why they had to do this in the US, so they could give little to no value with respect to voting rights. Not even a dividend will be paid.

i thought they did it in the us because they wanted god on their side.

float in the far east presumably canned because they didn't want aids ridden perverts to buy the shares?

[Crossie]

They only sold 10% of their share in the company so even if you bought them all you'd wield 0 influence.

Pretty much making the whole thing pointless, not sure what dividends theyll be paying out the next time the the books are updated, they didnt exactly have a great financial season last season.

"Here i've bought you a new car, but you're not allowed to drive it, you can't sit in it, but you can tell everyone it's yours ok?"

[Slim]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

[Ted Hughes]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

I think that's what it was about, simply pocketing some cash, which seems to have been successful, as opposed to actually giving a flying fuck about the rags.

Unfortunately, I can't see how the Glazers can keep this going (and there will certainly be some Herbert who will buy the club if it's available). Hopefully they can drag it out for a while longer & do some more damage whilst we build & consolidate our position though.

If & when the shit does hot the fan, are rag's supporters going to remember the ongoing part played by Ferguson in propping up this regime, or just continue to kiss his arse ?

[Slim]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

I think that's what it was about, simply pocketing some cash, which seems to have been successful, as opposed to actually giving a flying fuck about the rags.

Unfortunately, I can't see how the Glazers can keep this going (and there will certainly be some Herbert who will buy the club if it's available). Hopefully they can drag it out for a while longer & do some more damage whilst we build & consolidate our position though.

If & when the shit does hot the fan, are rag's supporters going to remember the ongoing part played by Ferguson in propping up this regime, or just continue to kiss his arse ?

Don't you hate it when the shit hots the fan?

[Piccsnumberoneblue]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

I think that's what it was about, simply pocketing some cash, which seems to have been successful, as opposed to actually giving a flying fuck about the rags.

Unfortunately, I can't see how the Glazers can keep this going (and there will certainly be some Herbert who will buy the club if it's available). Hopefully they can drag it out for a while longer & do some more damage whilst we build & consolidate our position though.

If & when the shit does hot the fan, are rag's supporters going to remember the ongoing part played by Ferguson in propping up this regime, or just continue to kiss his arse ?

They have an uncanny knack of rewriting history to make it suit them.

[ant london]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

Half right..I think.

I believe what was proposed is that some of the proceeds would be used to pay down some of the club's debt and the remainder going to the leprechaun family.

(btw...is your misspelling of Glazer deliberate. As it's you I would assume so, but for what purpose?)

[Slim]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

Half right..I think.

I believe what was proposed is that some of the proceeds would be used to pay down some of the club's debt and the remainder going to the leprechaun family.

(btw...is your misspelling of Glazer deliberate. As it's you I would assume so, but for what purpose?)

Do you still have the door to door salesmen in England trying to sell you double glazing or am I just old and out of touch now?

[Ted Hughes]

And I know Soccs and a couple of others probably have a better handle on this, but the Glaziers just sold shares, so that money isn't being pumped back into the club is it? It's going right in the Glaziers' pockets.

I think that's what it was about, simply pocketing some cash, which seems to have been successful, as opposed to actually giving a flying fuck about the rags.

Unfortunately, I can't see how the Glazers can keep this going (and there will certainly be some Herbert who will buy the club if it's available). Hopefully they can drag it out for a while longer & do some more damage whilst we build & consolidate our position though.

If & when the shit does hot the fan, are rag's supporters going to remember the ongoing part played by Ferguson in propping up this regime, or just continue to kiss his arse ?

Don't you hate it when the shit hots the fan?

Depends who is sat next to it.

[Dameerto]

Re Glaziers, I thought of it as a bunch of merchants applying a thin layer of substance over a gaping void.

[feedthegreek]

the guy who wrote that article as just been on talkshite he reckons it could be the beginning of the end for the glaziers and if someone bought the club for 500 million, the remaining debt would stay with the club, so whatever hapens whoever bought it would still have to keep paying the debt off so looks like they really have stitched up the scum big style.

[AG7]

Manchester United 'worth $2.2bn less than Glazers believe'
Manchester United's shares are worth just $5, well below the $14 they floated at on Friday, according to a US reseach team.

The shares closed up 1.1pc at $14.15 on Monday after listing in New York well below initial estimates of a range of $16 to $20.
PrivCo, the Private Company Financial Data Authority, says Manchester United is suffering from the “Facebook effect”, as investors fear that buying into consumer-led businesses could leave them with heavy losses.

Shares in Facebook have dropped from the $38 IPO price to close at $21.60 on Monday in what has been hailed as the most disastrous start to trading of any major flotation in the past decade.

“The ‘Facebook effect’ causes consumers to grow wary after suffering repeated losses on retail-investor targeted IPOs with unrealistic valuations," PrivCo said.

“Manchester IPO’s overpricing by some 280pc had no reasonable economic basis, as companies and bankers counting on a ‘retail investor put’ in light of the team’s large fanbase to place a floor under the stock’s price failed to materialise."

The firm said a fair value for the shares is $4.97, valuing the company at $800m (£510m), far below the $3bn that the Glazer family, who own the club, were hoping for.

Manchester United shares were flat on their first day of trading.

The club initially planned to float in the Far East but then focused on the US after the uncertain economic environment hindered a listing last year.

The initial public offering has raised $233m (£149m) through the sale of 16.7m shares. Half of the proceeds will go to the football club to pay down debt, and half to the Glazer family.

Despite the lower-then-expected pricing, the float still established Manchester United as the world’s most valuable football club.
Manchester United’s co-chairmen Avram and Joel Glazer and chief executive David Gill rang the bell at the New York Stock Exchange as trading in the football club began on Friday.

However, the float has created further anger among fans of the club, who are unhappy at the way the Glazer family are running it.
Duncan Drasdo, chief executive of the Manchester United Supporters Trust (MUST), a group set up in opposition to the Glazers, said: “It would seem all the analysis of the true valuation was correct; the Glazers and their advisers were being far too ambitious - or perhaps greedy - and the true value of the shares should be around $10 rather than the $20 the Glazers were seeking.

“It means less money coming into the club to pay down the Glazers’ debt and, more annoyingly, the Glazers still take further money out of the club for their own personal means.”

The Glazers hired heavyweight banks, including JP Morgan Chase, Credit Suisse and Deutsche Bank, to pitch the shares to investors.
Andrew Caldwell, a partner in valuation and accountacy group BDO, said: “The Manchester United IPO mimics Facebook in trying to capture value from market sentiment, but it doesn’t have the same room for income growth potential that Facebook, allegedly, has. It has a much smaller worldwide people franchise.

"The majority of the company’s income, approximately two thirds, is generated from broadcasting rights and matchday income. These are relatively fixed, so growth must be increased substantially over the remaining third.

"Interestingly enough , attempts to float on the stockmarkets in the areas in which that growth is supposed to be derived, were resoundingly unsuccessful. If the worry was that that there wasn’t enough interest to buy the share, what’s the likelihood of them buying the shirt?

"Football club valuations are notoriously dependent on factors other than financial ratios, particularly fan support and success on the field. When these start falling away, so does the value.

"It is quite clear that for clubs to be successful in the Premier league, substantial new investment in the club itself is required. This isn’t happening here, and how long before this has an impact on the success and support, is anyone’s guess."

-from The Telepgraph

[AG7]

Man Utd shares are propped up, claim analysts

Man United shares closed up yesterday, having traded consistently above their reduced float price, despite widespread claims that the shares were grossly overvalued.

The footballing giant’s IPO opened on a valuation of $14 on Friday, down from an initially planned $16 to $20 range, but analysts at PrivCo reckon shares are worth less than $5 each.

“The magnitude of the overvaluation of Manchester United’s IPO – and therefore the potential for a disastrous collapse in the company’s stock – is reminiscent of IPOs from Zynga and Groupon,” said PrivCo chief Sam Hamadeh.

Talking to City A.M., Hamadeh also suggested the lack of voting rights or a dividend, combined with the gargantuan debt burden, as further reasons the share price will head down.

Looking at nine comparable firms and using three different methods to value the shares, PrivCo comes up with a value of $4.97, less than two-fifths of the initial price.

But the analyst puts the current relative buoyancy of the shares down to the fact that underwriters continue to maintain $14 buy orders.

“Over the short term the shares can trade at a premium to what they’re worth,” Ken Perkins, an analyst at Morningstar, told City A.M. “[They] potentially could have gone lower but people are stepping in any time it threatens to go beneath $14.”

But in the coming days and weeks PrivCo and others expect financial fundamentals to reassert themselves as lead bank Jefferies & Co withdraw their support. Jefferies declined to comment.

- from City AM