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Manchester United kicks off U.S. trade on the NYSE

posted 10 Aug 2012, 07:17 by Mpelembe Admin   [ updated 10 Aug 2012, 07:18 ]

Soccer powerhouse Manchester United launches its U.S. IPO on the New York Stock Exchange.

NEW YORK CITY, NEW YORK, UNITED STATES (AUGUST 10, 2012) (NYSE) - There were a lot of red jerseys on the floor of the New York Stock Exchange (NYSE) on Friday morning (August 10) as Manchester United's initial public offering (IPO) made a cut-price debut after a flotation that has disappointed the English soccer club's American owners and enraged some of its fans.

Soccer is the world's most popular sport, but the setback for the IPO underlines the limited appeal of even its biggest names for investors.

The IPO priced at $14 (USD), below the $16-20 range the club's bankers had been seeking. It valued the 19-times English champions at $2.3 billion and shaved as much as $100 million off the proceeds expected for the team and its owners.

The offering raised $233 million, to be split equally between the club and its owners, the Florida-based Glazer family, owners of the Tampa Bay Buccaneers NFL team.

The loss of as much as $50 million for the club will be a blow as it copes with a heavy debt burden and seeks to buy new players, who cost tens of millions of dollars each. United had debt of 423 million pounds ($661 million) at the end of March.

The 134-year-old club looked at listing in Singapore and Hong Kong last year to tap into its large Asian fan base but pulled out, blaming volatile markets.

The Glazers bought United for 790 million pounds in a highly leveraged deal in 2005, taking it private after 14 years on the London Stock Exchange.

Some fans argue that the cost of the debt has forced up tick et prices for the club, which draws sell-out crowds of around 76,000 at its Old Trafford Stadium and claims 659 million followers across the world.

They also say repayments have hindered the team's ability to compete with big-spending rivals on the pitch. The Premier League season begins in just over a week, when United fans will be able to demonstrate their feelings over the club's ownership.

In other market news, U.S. stocks opened lower on Friday after a far weaker-than-expected rate of growth in Chinese exports, but the S&P 500 remained on track to post its fifth straight week of gains.

The Dow Jones industrial average dropped 38.56 points, or 0.29 percent, to 13,126.63. The Standard & Poor's 500 Index shed 4.24 points, or 0.30 percent, to 1,398.56. The Nasdaq Composite Index lost 9.31 points, or 0.31 percent, to 3,009.33.