NEW YORK, USA (AP) — English soccer club Manchester United made a disappointing debut on the New York Stock Exchange yesterday, even after opening at a discounted price, with enthusiasm for the celebrated team overshadowed by its debt load and financial track record.
Many had expected that fans of one of the most famous football clubs in the world would snap up shares, leading to a pop in early trading, but that didn't materialise. Some analysts had warned that the initial public offering was overvalued, particularly since the club is debt ridden and the family that owns them, the Glazers, retained almost total voting control over the team.
"There was a lot of wing flapping, but not much flying today," said John Fitzgibbon, the founder of IPOScoop.com. "It's reflective of the overall IPO market, they may hit a couple of roadbumps, but the deals are getting done."
Manchester United shares were flat at $14 in midday trading on the New York Stock Exchange, the level they were priced at by the underwriters late Thursday.
The stock, traded under the MANU ticker symbol, had been expected to be sold for between $16 and $20 per share.
The $14 per share price still valued the club at $2.3 billion, slightly higher than the record $2 billion paid for the Los Angeles Dodgers baseball team earlier this year.
The 134-year-old soccer club expects to make $110.3 million from its offering of 8.3 million shares. It will use $101.7 million to pay down senior notes. The Glazer family, who own the team, is selling another 8.3 million shares separately.
The family's 2005 leveraged takeover was valued at $1.47 billion, much of it borrowed. United carried £416.7 million ($666.2 million) in debt as of March 31. It had no debt when it was bought by the Glazer family in 2005.
The Glazers are the American family that already owns the Tampa Bay Buccaneers. Malcolm Glazer is CEO of First Allied Corp, a holding company with numerous business interests. His two sons Avram and Joel are co-chairmen of Manchester United.
After the stock offering, the Glazers will keep control of the team through Class B shares that have 10 times the voting power of the stock sold to the public.
Manchester United are one of the most renowned sports teams in the world. It claims 659 million followers and 26.9 million Facebook fans. Half of its fans are in Asia, where its games are televised and its replica shirts and other products are huge sellers. But analysts are more skeptical of the team, known as The Red Devils, as a financial commodity. It is not a high-growth company like a tech startup, but like some tech startups, it is heavily in debt.