Man Utd shares fall after Sir Alex announces retirement
Manchester United shares fell in New York after Sir Alex Ferguson announced his retirement from the football club.
The news of his retirement was announced when US trading markets were closed, but as trading began the club’s shares fell by a massive 4.5%.
In a document release ahead of the club’s stock market flotation last year, the club said its business was relying on its ability to attract and retain top players. It said: “Any successor to our current manager may not be as successful as our current manager.”
The shares finally closed down 1.8%.
Rumours are rife about who will take over as the latest manager, when Sir Alex steps down at the end of this football season.
Whoever gets the job at Manchester United will take on a club laden with £370m of debt and tightly controlled by the Glazer family.
The Glazer family bought the club in 2005 for £790m in a controversial move that loaded the club with debt.
Manchester United was placed on the stock market in August 2012, and was sold as 16.7 million shares, equal to around 10% stake in the club. Since the floatation, shares have increased by 34%.
Ken Perkins, an analyst at Morningstar said: “When we initially did the analysis of the Initial Public Offering one of the concerns about the outlook was Sir Alex leaving.”
He also said if the club was to install a new manager quickly, it would instil some confidence in the shares in the short term, whereas many investors are more interested in the company’s ability to generate revenues across the long term.
Manchester United currently gets the majority of its income from three sources: match day ticket sales, broadcasting deals and commercial business.