Manchester United IPO: The Red Devils Will Fail Miserably on Wall Street

Josh Schoch@JoshSchochAnalyst IIIAugust 11, 2012

NEW YORK, NY - AUGUST 10:  In this handout photo provided by the NYSE Euronext, Manchester United Executives Joel Glazer (2nd L) and Avram Glazer (C) prepare to ring the Opening Bell at the New York Stock Exchange on August 10, 2012 in New York City. Manchester United shares started trading at USD 14.05 at the opening of the New York Stock Exchange. (Photo Dario Cantatore/Getty Images via NYSE Euronext)
Handout/Getty Images

With the release of Manchester United's stock for public investors, the Red Devils made a bold move financially. Unfortunately for them, the stock is doomed to fail.

With such a well-known public entity being involved, the stock immediately sparked a conversation, but most of what was said didn't favor Man U.

Forbes warned the world against buying the stock, stating that "publicly traded professional sports teams rarely outperform the market."

If that wasn't enough to dissuade investors, CBS's Kathy Kristof took more than a jab at the stock, akin to taking a gun to a knife-fight.

Like Facebook (FB), which had such a common-man appeal that no number of warnings could possibly wave investors away from that train-wreck-about-to-happen (but don't say we didn't try), investors are nearly certain to snap up shares in the English football team in the feeding frenzy that characterizes the IPO aftermarket.

Calling a stock a "train-wreck-about-to-happen," whether directly or indirectly, really hurts its value.

Analysts have a good deal of power over public perception, and therefore the success or failure of stocks. Because of that, it's no wonder that the stock price was slashed before it even hit the market.

Even at just $14 per share, the stock didn't do much on its first day. In fact, it didn't do anything.

Surprisingly, MANU got most of its interest from American investors. Vice Chairman Edward Woodward thought this was a positive sign, saying so in an interview with Business Week.

The understanding that U.S. investors have around sports business, given it’s the most developed sport market in the world, has been a benefit.

The stock actually started the day well, never dropping below 14.00. However, by the end of the day it didn't make any progress, and the most telling thing now will be how it opens after the weekend.

So far, things look bleak for Manchester United on the stock market. While Woodward says that he's optimistic, I believe that the analysts' comments will weigh the stock down, leading to a miserable future on Wall Street for Man U.