Manchester United’s NYSE float is game of two halves for investors

Shares opened at $14.05 – just above the $14 initial price – valuing the club at around £1.5 billion, but drifted down later in the day.

As the market opened, United’s co-chairmen Avram and Joel Glazer and chief executive David Gill applauded from the stock exchange’s balcony, which was adorned with the club’s emblem, while many New York traders wore the club’s trademark red home kit.

Shavaz Dhalla, financial trader at Spreadex, said the positive initial opening for the shares in the biggest sporting IPO yet was possibly due to smaller retail investors looking to pick up a token holding.

But as the club’s share price slowly began to fall back he added: “Clearly, investors who are actually looking for a return as well as a shareholder voting right are steering clear,” he said, referring to the fact that the shares sold will only carry total voting rights of 1.3 per cent.

The IPO was below the $16 to $20 range the club’s bankers had been seeking under the offer, shaving as much as $100m off the proceeds initially expected for the team and its owners from the sale of 10 per cent of the club.

The lower flotation price came after the Glazer family previously failed to garner sufficient support to sell shares on exchanges in Hong Kong and Singapore.

In the end, the offering raised $233m (£150m), to be split equally between the club and its owners, the Florida-based Glazer family, owner of the Tampa Bay Buccaneers NFL team.

One of the club’s top officials said the team took less money than planned because it preferred the mix of investors involved at the lower price.

Ed Woodward, vice chairman, said: “We priced below the range because as you looked at the book, the huge number of high-quality institutional investors that were there at $14 just made us more comfortable in terms of the longer-term view here with regard to the type of investor base we wanted.”

The offering came as the club looks to cope with a heavy debt burden and seeks to buy new players.

But with so much tied to success on the field, football clubs are seen as an inherently risky investment with some fund managers giving the Manchester United IPO a wide berth.

“I didn’t even look at it. I would never, ever invest in a football club,” said the head of UK equities at an investment house running around £100bn of assets.

Emmanuel Hembert of management consultancy AT Kearney pointed out “the first goal of a club is not to make money for shareholders but to win trophies”.

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

Earlier this month, a leading United fans’ group called for a boycott of the club’s expanding portfolio of sponsors in protest at the planned flotation.