Are you a fan wanting to invest in your favorite team? Or are you someone simply looking for an investment opportunity out of the ordinary? Investing in sports teams is possible, and this article will go through the practicalities of trading in Manchester United.
Buying Shares in Manchester United
For those that do know this, Manchester United is a soccer club with its origin and seat in the UK, England. The club competes in the Premier League, the highest division for soccer in England. The Premier League has followers all around the world, and is quite heavily followed by fans and sports media globally.
As a fan you probably know everything there is to know about Manchester United, and we will not bore you further with any more details on the club’s history and accomplishments sports wise. We will instead put more time and effort on the topic of this article, the one of investing in the club and the how of it. Below you will find information on investing in sport teams in general, and Manchester United in particular.
Buying Shares in Sports Teams
Manchester United, aside from being a successful sports club is also a company. And it’s a company that is listed and publicly traded, something that is true of a lot of big sports club with high ambitions. It is a way of securing external capital for the club and makes sure it is effectively capitalized and allows it to grow its business. It is an important point to make, as smaller clubs that are not organized as companies usually have to resort to relying entirely on sponsorship deals that may or may not materialize, something that jeopardizes the business and makes it difficult to attract good players.
Prior to buying the stock of any sports team, you need to do your research on the growth possibilities of the company. Even if you love the team, it does not necessarily mean the team’s stock is good business. On the other hand, as with all stocks, there may be particular factors pointing to the stock being an attractive investment. As always when trading, follow your trading strategy and do not fall into the trap of investing with your feelings guiding important trading decisions.
Trading Manchester United plc Stock
Manchester United plc made its latest introduction to the New York Stock Exchange (NYSE) in 2012 with the ticker symbol MANU. When the IPO took place the stock sold at $14 and sells for $15.75 today. Manchester United had however been introduced to the market before, in 1991 on the London Stock Exchange (LSE) prior to being bought and then taken private again. When it was introduced to the LSE, the IPO price was £8.33 but lost ¾ of its value less than a decade later. The market thus tells a different tale of the stock’s success, something that may be tied to the initial pricing; an overpriced stock during its introduction is bound to end in tears for the initial investors.
The twists and turns regarding changes in ownership, financial restructurings etc is an issue we will not delve deeper into; an interesting matter as it may be it is beyond the scope of the main topic.
Aside from the usual factors to check as an investor, this type of trade in a sports club connected stock might of course also carry another dimension: investing as a fan, and being too emotionally involved as we already have mentioned. You might be in it for the simple fact that you wish to support your team. If you do see this solely or mainly as an investment, you still need to do the usual due diligence in the form that suits your trading strategy (e.g. fundamental analysis, technical analysis).
So what can drive the price of the Manchester United stock, and of sport teams in general? Manchester United is one of the world’s most profitable football teams, something that should already be priced into the stock price. The question hinges on the club’s growth possibilities. Should the club be approached by wealthy investors wishing to acquire the team, it would definitely be an interesting turn of events that works in the favor of an increased stock price.
For the pure sports fan wanting to invest in its favorite team, it would be good to keep in mind that with the current leadership spearheaded by the main owner Glazier, there is little possibility for stock owners to influence how the team is run or what major business and strategy decisions are taken. Issues relating to this was seen when fans showed their anger with the debt level of Manchester United used to have, despite a successful restructuring. The processes and decisions taken are not necessarily transparent, and as fan owning the stock you need to keep this in mind.
For those that like to do so, the asset can be traded via Binary Options (see our article on Binary Option trading). We will not delve deeper into it here, but it is an option for those that due to reasons such as trading strategy or other aspects feel more comfortable trading via options.
To summarize, the stock of sports clubs is a bit particular due to the nature of such companies. Their main attraction and service offered is their success on the playing field which is then turned into profits via exposure, product sales, ticket sales etc.
As a sports fan, you might want to buy the stock of Manchester U just because you love them. As an investor, you need to value the stock and conclude if you find the price overpriced, neutral or if there is room for growth. The stock has gained 12.5% since its IPO on NYSE in 2012; will it grow further or not?
If you have a trading strategy more oriented towards options trading, trading the asset via Binary Options may be an option for you (pun not intended).