MUFC overvalued by 281%, Jefferies bought big to support price
Independent authority warns price could fall 64%
America’s Private Company Financial Data Authority (privco.com) has emerged to quantify the level of hyped Manchester United valuation following last week’s New York IPO. It also vindicates The Slog’s claim that directionalised buying was necessary in order to stop the launch turning into a disaster.
The newly released analysis of Manchester United’s real valuation calculates that the club (offered at $14 a share) is in fact worth a mere $4.97/share, only about 1/3 of its $14 IPO asking price. Agents working on the launch had to place large open-market bids at $14/share to prevent the stock from closing below the IPO price.
The PrivCo data also suggests that, when put alongside other recent IPOs where IPO underwriters were forced to make ‘stabilizing bids”‘on first days’ trading ‘correlated with a rapid plunge in stock prices’ soon afterwards. This augurs very badly indeed for United’s public shareholders.
PrivCo CEO and Founder Sam Hamadeh stated, “The magnitude of the overvaluation of ManU’s IPO – and therefore the potential for a disastrous collapse in the company’s stock – is reminiscent of IPOs from Zynga and Groupon.”
As the market opened again yesterday (Monday) United kicked off below the offer price – at $13.96 – and more massive support buying was required:
To the far left of this Marketwatch graph, we see MUFC at the red dot opening below $14. Massive support moves the price up for 90 minutes to the second red dot. It then meanders down again until dropping back to…$14 again. (The updated version of ‘after hours’ shows United IPO agents then buying big again.)
So in a nutshell, a lot of people are spending a lot of money to make the Glasers rich, but it ain’t gonna happen. Stay tuned.