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Man Utd shares debut in New York

Category: England

Published: 10th Aug 2012 15:45:16

Shares in Manchester United have begun trading on the New York Stock Exchange (NYSE).

The shares debuted at $14.05, up from the float price of $14, opening trading with the stockmarket ticker MANU.

On Thursday, Manchester United was forced to cut the value of the shares to $14 each from $16-$20.

The shares on sale represent 10% of the club, which it hopes will raise $233m (£150m) to pay off some debt - well below the $333m initially hoped for.

As expected, interest in the shares was subdued, as many analysts had warned that the offer price overvalued the club.

The NYSE celebrated the share launch by laying astroturf between the bell and the club's market-maker.

Manchester United executives, including members of the controlling Glazer family, rang the opening bell on the exchange, while some traders sported the club's shirt.

The shares do not pay a dividend to investors, and it is not clear exactly how much of the money raised will go towards paying down the club's debts and how much will go to the Glazers.

A number of analysts have warned the shares offer little value to investors.

"Maybe a few hedge funds will take a small punt of $5m-$10m, which if it goes bad, they can easily write off, Mike Jarman, chief market strategist for H20 Markets - a former professional footballer and a Manchester United fan himself, told the BBC.

He dubbed the sale "son of Facebook" - referring to the social media company's recent stockmarket floatation.

Facebook shares opened trading in May with a guide price of $38, but they are currently selling at around $21.

"Son of Facebook? I wish it was - but it's even worse than that. It's priced to fail," said Mr Jarman.

The club had tried unsuccessfully to list the shares in Singapore, but a reported lack of interest led it to pull the sale.

It then tried to list in London, before confirming that it would list in New York.

Despite the scepticism voiced by many analysts, the club itself maintains it has strong financials.

Its commercial revenue grew from £66m in 2009 to £103m in 2011, thanks to sponsorship and merchandising deals.

It made a profit of £13m on continuing operations in 2011. It estimates that it will have made profits of £23m in 2012, but this includes a tax credit of almost £30m.

Without the credit the club would have made a loss, it said.

The Old Trafford club said it intended to increase revenue and profits in the coming years from sponsorship deals, sales of Manchester United branded products, broadcasting rights and improving its new media and mobile offerings.

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