George Soros buys into Manchester United $MANU #shortsales #soros #hedgefund

DAVOS/SWITZERLAND, 27JAN10 - George Soros, Cha...

DAVOS/SWITZERLAND, 27JAN10 – George Soros, Chairman, Soros Fund Management, USA, captured during the session ‘Rebuilding Economics’ of the Annual Meeting 2010 of the World Economic Forum in Davos, Switzerland, January 27, 2010 at the Congress Centre. (Photo credit: Wikipedia)

George Soros hedge fund extraordinaire bought a huge and I mean huge slug of Class A Manchester United (NYSE:MANU) He has somewhere around 7.8% but claims he is not mounting a takeover. Basically he can’t; the Glaser family controls enough Class B shares which have super voting privileges that can out gun anything in the boardroom. Therefore no one will try.

George Soros is known to have invested in soccer (Excuse me football as non Americans refer to it) in the past. After all it is the worlds most popular sport. The stock is down a little after a summer time IPO. Manchester United is heavily indebted and will not produce huge amounts of free cash flow soon. So what’s the attraction.

According to a blog post on FT/Alphaville on Aug 20, 2012 by Joseph Cotterill the shorts are starting to circle. They think they smell blood in the water. OK there is some blood in the water. But you do not have the makings of a short raid. What you probably have is the makings of a classic short squeeze. George Soros by tying up a large junk of the public float just eliminated a lot of liquidity making shorting an even higher risk venture than normal.

So George Soros is aware of the sharks circling. Hell he may even throw some cheap hamburger in the water to excite them a little more. Right now if he may even decide to lend the stock to shorts and charge a rental fee. If the shorts beat down the price he can call the shares and create buying momentum as shorts sellers scramble to cover.

He may buy more at lower prices in the future.

Unethical you say. Hell this guy broke the Bank of England.

Illegal you say. This guy operates globally and could do this behind closed doors where you have banking secrecy that says it is not illegal. So there.

In any event isn’t it interesting that we refer to him as George Soros and rarely if ever mention any hedge fund name. It’s always George Soros this and George Soros that.

George Gutowski writes from a caveat emptor perspective.

Manchester United Hail Mary IPO Differs from Facebook $MANU $FB

Manchester United's crest

Manchester United’s crest (Photo credit: Wikipedia)

Manchester United (NYSE:MANU) differs from Facebook in some highly significant ways. Facebook was a fairy tale which still might come true some time this millennium. Manchester United is a football team (soccer for the Yanks) playing to established metrics. Oh yeah the big metric is Malcolm Glazer’s need to reduce debt and get his ass out of a sling.

So you see sports fans the two IPO’s are very different. There will always be rabid sports fans, soccer hooligans and very over paid soccer stars that make North American athletes look like welfare cases.

It all comes down to valuation and the PE ratio. Facebook was somewhere around a 60 forward PE which of course is ridiculous. Manchester United is based on both A & B shares a 95 PE. Morgan Stanley (NYSE:MS) has fled the deal once they realized it needed to be done in North America.

Somehow I do not believe there will be an order imbalance. NYSE will not be stressed by a deal which just may be DOA.

Will Malcolm Glazer’s empire start to wobble without this deal going through?

George Gutowski writes from a caveat emptor perspective.


Manchester United IPO maybe #GlazerFamily Shrewdness #IPO #premierleague

F.C. United of Manchester

Image via Wikipedia

Manchester United is making noises about an IPO in Asia. Singapore to be specific. The big promote is on. Credit Suisse is managing the sale and other stuff. Normal SEC and Euro rules need not apply if you are listing in Asia. Wonder if shareholders will receive specially autographed footballs. That’s soccer balls to Americans. Go to a bar in NYC in the lower east side called Nevada Smith and you will be properly educated into what the rest of the world calls “Football”

But any way here is the beginnings of the promote. The Glazer family, owners of the Tampa Bay Buccaneers of the NFL  might raise about $1 billion. There is the underlying strategy. The word as reported by The Daily Mail newspaper is that the Qatar royal family was close to making a £1.5 billion bid.

They have decided to list in Asia because of the huge fan base. Yeah right. Sports fans are not your typical shareholders. Sports fans drink beer driving revenues and make bets which helps nourish professional sport eco-systems. BTW there are huge pools of sports fans in Europe. Manchester United is a known commodity.

No, the reason why Asia was picked was the advantageous regulatory environment and growing wealth of many new investors. Here is another forecast. The profitability of the team is a little suspect. They have red ink problems.  When the numbers start to stink and the stock drops watch for the Glazers to buy back the stock and reel it back in. Classic case of sell high buy low. 

They are still working on the complete underwriting team.

Disclosure: George Gutowski writes from a caveat emptor perspective. I do not own any professional sports franchises. Holding a professional sports franchise as an investment does not constitute a core holding for most investors large or small. This is going to be fun!