Disappointment off the pitch as cut-price Man Utd float fails to fly in the Big Apple
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Saturday 11 August 2012
Manchester United's share price failed to electrify investors last night on their first day of trading, despite being launched at a massive discount.
And, speaking shortly after ringing the bell at the New York Stock Exchange, chief executive David Gill even had to deny claims the club had been talking up a purchase of Arsenal star Robin Van Persie to boost its flotation prospects.
The shares, which had originally been expected to be sold to new investors at between $16 and $20 each, were eventually priced at just $14, valuing the club at $2.33 billion (£1.49 billion). But despite being "priced to go" in Wall Street jargon, they held almost still at $14.04. Traders at the NYSE were decked out in United shirts as Mr Gill and controversial owners Joel and Avram Glazer rang the opening bell. The trading floor was carpeted with AstroTurf for the occasion.
Investors have been extremely wary of buying into the club, partly because the Glazer brothers are selling only a 10% stake and are not giving up any management control.
As one investor said: "There still looks to be more risk on the downside than the up."
Mr Gill denied supporters' claims that the Glazers were stripping funds out of the club with the flotation, rather than using the money to spend on new players following a disappointing season.
"It was disappointing but as a club, we are not impacted at all by the capital structure. I've been in this business for 15 years... along with the Glazers, I know that what happens on the pitch is a key factor in what happens off the pitch."
He denied the decision of the Glazers to take money out of the club from the flotation would hamper his ability to buy new players, saying "We have sufficient funds to invest properly and sensibly in our playing squad." He declined to comment on the progress of the Van Persie talks but stressed to CNBC: "We didn't start rumours [on Van Persie] just to puff up our share price."
Sean Bones of the Manchester United Supporters Trust, which is bitterly opposed to the Glazers' ownership, was unimpressed. "At the end of the day, we feel the Glazers see Manchester United as a cash cow and now they are milking it."
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