Manchester United IPO: Stock Market Debut Shows United's Desperation

Feeling the pressure of its business constraints, Manchester United is expected to make its stock market debut on the New York Stock Exchange on Friday.

The only problem is, acts of desperation generally don't work out too well on the market.

United, which has been trying to stay competitive in world football while lowering costs, is expected to bring in about $300 million in its deal on Friday, but its valuation proves just how desperate the club is.

The historic Premier League organization will have a market value of $3.8 billion with its initial public offering.

But David Menlow, president of IPOfinancial.com, has voiced many people's concerns about the valuation, per NBCNews.com: “I don’t know what they have in their quiver to bring in additional revenues. They can bring in capital with a stock offering, but you have real constraints in place.”

The point is, United can only do so much on the market. Gaining $300 million right away is a quick fix, but—like most quick fixes—it's only going to break down farther down the line. United still has to pay for high-priced players to remain competitive in the Premier League—especially after rival Manchester City's big spending—and new sponsorships and merchandise likely won't make up for it.

This ultimately has the chance of blowing up in United's face if investors start losing money because of its high valuation. When you start getting past $3 billion in market value, you better be a powerhouse in many areas, with many opportunities for further growth. It's hard to see that with United right now.

It's potentially a Catch-22 for United.

If the club pays for high-priced stars, it remains competitive in the Premier League, but it starts outspending its valuation.

If United doesn't pay for high-priced stars, it runs the risk of falling behind in the Premier League, and who wants to invest in a disappointing sports franchise?

This smells like desperation, and it may end up stinking like it, too.