What Really Moves Manchester United Stock? Not What You Think
Investing.com | Feb 07, 2016 09:43
by James Fattal
Last week saw the English Premier League winter transfer window come to a close, setting a record £1 billion plus for the amount spent by football clubs in England’s top league within a single season. For those less familiar with the workings of the Premier League transfer system, clubs are allowed just two ‘transfer windows’ to buy players in a single season; a Summer window (July-August) and a Winter window (January).
However, there's one club in particular that the transfer window will have had wider implications for than their 19 Premier League counterparts and despite failing to reinforce in January for the first time since 2005, that club is Manchester United Ltd (N:MANU).
Not because a poor stretch of form has seen the English powerhouse come under increased pressure and criticism, but because they are England's only publicly traded team on the New York Stock Exchange (NYSE).
While you may think the stock is ever-plummeting in an increasingly poor season for the club, interestingly enough, it is not results that drive the Manchester United LTD stock. In fact, three consecutive Premier League losses to Bournemouth, Norwich and Stoke in December saw barely any change in the stock whatsoever, whereas a win over arch rivals Liverpool two weeks ago actually saw the stock fall ever-so-slightly.
So what does seem to affect the stock? Believe it or not, it's transfer activity and managerial changes. With their ever-unpopular current manager Louis van Gaal not doing anything to enhance his reputation in Manchester, and the dismay with the current group of players, fans may have had high hopes for new players and a managerial sacking going into January.
When the club’s greatest-ever manager, Sir Alex Ferguson, announced his retirement from the game in May 2013, the MANU stock accordingly dropped for the next two months despite the club winning their 20th league title. Presumably, a popular sacking to van Gaal would have the adverse effect and see the club's stock suddenly rise.
However, this was not the case and amid the multitude of rumors, the club have so far stuck with their unpopular boss. Furthermore, despite weeks of speculation and hype throughout the past month regarding new incoming players, a January transfer window that failed to bring in a single player has seen the club’s stock fall to its lowest point since March 2014.
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A deeper analysis of the past few transfer windows since the club went public in August 2012 shows just what gets Manchester United investors excited— and that’s high profile player signings.
h3 Summer 2015/h3- Transfer Activity: HIGH
Result: A busy transfer window saw the club spend big money on high profile players. Optimism around the club caused the stock to reach a high of 19.08 from a starting point of 18.02.
- Transfer Activity: LOW
Result: Little transfer activity leads to little overall change in the stock, with a low of 15.15 reached from a starting-point of 15.92.
- Transfer Activity: HIGH
Result: Another very busy summer for Manchester United saw them break the English Transfer Record with Angel Di Maria signing from Real Madrid for £59.7 million. The stock reached its highest point ever, rising to 19.97, up from a starting-point of 17.51.
- Transfer Activity: HIGH
Result: Manchester United signed highly sought-after, Juan Mata from rivals Chelsea for a fee of £37.1 million. While this was the only notable signing of the transfer window, the stock rose from 15.45 at the start of January to a high of 15.87.
- Transfer Activity: LOW
Result: With the only signing, an unpopular Marouane Fellaini for a hefty £27.5 million fee, the MANU stock saw little movement, declining to a point of 16.49 at the close of the window.
Interested in owning a piece of Manchester United? Here’s some advice:
Don’t be put off by a run of form that sees the club slip further down the table or get too excited by a sudden improvement that sees them challenge for the title – this won’t change the stock price. Instead, keep an eye on developments with manager Louis van Gaal’s ever-volatile position at the club and look to cash in on what is anticipated to be a very busy summer transfer window for the club in July.
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