United thread 2012/13 (inc merged IPO thread)

[Ja Salford Blue]

just out of interest, who decides how may shares a company has to sell in the first place?

 

[ABU inc GDR]

just out of interest, who decides how may shares a company has to sell in the first place?

The number of shares is agreed between the financial institutions underwritting the share offer, in this case it's Jefferiies Inc. It depends who they are trying to sell to, if private investors or fans are encouraged to buy the value of the share has to be low enought for these to be tempted, no point trying to sell shares worths $200 to fans.

 

[ABU inc GDR]

The way it worked was that they had an indicative price range of $16-20 but then potential investors put in offers after the roadshow and looking at the figures. Some did meet the valuation I gather but to actually get the offer to be fully or near-fully subscribed required them to take offers around the $14 mark. It may yet be that the underwiters ended up with some shares but we won't know that until later on I guess.

The important thing now is the price they trade at on the market as that gives the best indicative value of what the Glazers could get. That's at the mercy of their on-the-pitch performance now so if they bomb out the CL again, the share price will go down. When Baconface retires, unless they get Mourinho or Guardiola then the share price will go down. If they bring in RVP, that's £20+m cash and £12m a year out of their already depleted coffers.

My suspicion is that if the share price does dive, the Glazers will seek to "de-list" making it harder for people to sell.

Agree with what you say there, no suprise the float is on a Friday the day before the market closes for the weekend, prudent planning on behalf of Jeffries Inc the underwriters. Having syphoned out the hype in the prospectus the market has put a value of $10 on the shares, expecting that to be the figire reached in the next 2 weeks. The thing is you can't rely on any of the Glazer claims so we could be on for a roller coaster which would be interesting.

 

[SWP's back]

Yes mate, I've just read that.

I'd guess that, like I mentioned above, it was an over-optimistic valuation that they never really expected them to sell at.

Kind of a flipside to a club putting a bid in for a player that was way below the presumable asking price because you know they will want more.

Exactly. And I dived into this thread about 30 mins too late it would appear! ;-)

It seems this IPO then has been a bit of a damp squib. The positives for us so far is that they are not that much further on from where they were before then?

Depends on how you look at it really.

The way I see it, it's not ideal but it's not the end of the world either. I think a lot of people were expecting the shares to go for even less so, whilst they shares did sell for $4-$6 less than what the Glaziers wanted, it's still more than what a lot of people, on the outside looking in, were expecting them to go for.

I'd have thought something like a marquee signing or something like that might have upped the share price a tad perhaps.

Let's see what they trader at in 12-48 hours. And again what they trade at when the new accounts come out.

 

[Latics Fan SJK]

Exactly. And I dived into this thread about 30 mins too late it would appear! ;-)

It seems this IPO then has been a bit of a damp squib. The positives for us so far is that they are not that much further on from where they were before then?

Depends on how you look at it really.

The way I see it, it's not ideal but it's not the end of the world either. I think a lot of people were expecting the shares to go for even less so, whilst they shares did sell for $4-$6 less than what the Glaziers wanted, it's still more than what a lot of people, on the outside looking in, were expecting them to go for.

I'd have thought something like a marquee signing or something like that might have upped the share price a tad perhaps.

Let's see what they trader at in 12-48 hours. And again what they trade at when the new accounts come out.

I agree that it may well be even lower.

That's why I think Fergie is after a 'marquee' signing. A little attempt to drum up interest that they're not on the 'decline' so to speak and can compete in the transfer market.

 

[VOOMER]

Aug 8 (Reuters) - The global marketing chief for General Motors Co was fired last week for not properly disclosing as much as a third of the cost of a $559 million sponsorship deal with English soccer club Manchester United, people familiar with the matter said on Wednesday.

Joel Ewanick was ousted after a whistle-blower in the No. 1 U.S. automaker's marketing department questioned some aspects of the deal that will put the company's Chevrolet brand name on the shirts of the soccer club's players starting in the 2014-2015 season, said the people, who asked not to be identified discussing a matter that has not been made public.

There are no signs Ewanick profited personally from the deal, but GM continues to investigate not only this deal but other contracts he had agreed to, the people said.

Ewanick could not immediately be reached, but previously refused to discuss his ouster. GM declined to comment, but previously said Ewanick left because he "failed to meet the expectations that the company has for its employees."

Manchester United said last week that the 7-year sponsorship deal would bring in $559 million. GM will pay fees of $18.6 million in this year's and next year's season, before paying $70 million in the 2014-2105 season. GM's payments will rise 2.1 percent each season thereafter, through the 2020-2021 season.

After the deal was announced, sources said GM had renegotiated portions of the agreement for less money.

On Wednesday, people familiar with the matter said Ewanick had split the price of the sponsorship deal among several marketing budgets to avoid company spending limits.

Bloomberg reported details of Ewanick's exit, including the involvement of the whistle-blower, earlier on Wednesday.

Ewanick denied he had sought to avoid alerting his bosses or that the deal's structure was unusual after he was confronted, the people said. The former marketing executive was questioned for two to three days by GM corporate counsel Michael Millikin, the people said.

GM executives have said repeatedly the company did not have an issue with Ewanick's marketing strategy and they would not change the direction the marketing department has taken.

Ewanick, 52, was named vice president and head of GM's U.S. marketing in May 2010, about seven months before the automaker's blockbuster initial public offering in November of that year. He was given free rein to shake up GM's marketing, which had been perceived as stale.

The first major effort under his watch was the "Chevy Runs Deep" campaign that launched at the start of the Major League Baseball's World Series in 2010. Critics say the campaign has failed to connect well with consumers.

When he was promoted to global marketing chief in December 2010, Ewanick said the move was intended to give marketing a seat at the executive conference table and a say in planning and budgeting for new GM vehicles.

Ewanick, who was credited with helping drive Hyundai Motor Co's fast growth in the U.S. market and briefly worked at Nissan Motor Co, steered GM back to sponsorship of high-profile events like the Super Bowl.

In May, he announced GM would pull its paid ads from Facebook days before the highly anticipated initial public stock offering for the social networking website, and said GM would not advertise on CBS during the 2013 Super Bowl because they were both overpriced.

Earlier this year, GM announced efforts to save $2 billion over five years by pruning the number of ad agencies it uses


This looks far from over, its deception, am I wrong?

 

[denislawsbackheel]

Exactly. And I dived into this thread about 30 mins too late it would appear! ;-)

It seems this IPO then has been a bit of a damp squib. The positives for us so far is that they are not that much further on from where they were before then?

Depends on how you look at it really.

The way I see it, it's not ideal but it's not the end of the world either. I think a lot of people were expecting the shares to go for even less so, whilst they shares did sell for $4-$6 less than what the Glaziers wanted, it's still more than what a lot of people, on the outside looking in, were expecting them to go for.

I'd have thought something like a marquee signing or something like that might have upped the share price a tad perhaps.

Let's see what they trader at in 12-48 hours. And again what they trade at when the new accounts come out.

don't they avoid accounts for a few years being Cayman registered?

 

[Matty]

On the GM thing, if Ewanick circumvented company spending limits by spreading the cost over various budgets you'd imagine that was against company policy. As such you'd think the company might be able, should they wish to, renegotiate the deal, or simply enter a legal challenge to it claiming it was signed by, essentially, a fraudster. Maybe Uniteds "bumper" sponsorship deal may not end up being quiet as lucrative as they'd hope!

I'm far from an expert on shares, company valuations, expected returns etc, but I really do fail to see the financial rewards to investors in this IPO. With no voting rights of any worth, and no dividends to be paid, the only way shareholders can make money on this deal is if the share price increases and they sell up, am I right? Based on the valuation placed upon United by $14 shares surely it seems highly unlikely any meaningful profit can be made on the shares, especially with Fergies retirement not too far off, and the challenges to United both domestically and in Europe being greater than ever. It just seems idiotic to expect to "win" on this IPO for shareholders.

 

[JM Mcr]

1) Yes <a class="postlink" href="http://www.stockmarketdigital.com/ipos/manchester-united-sets-ipo-terms" onclick="window.open(this.href);return false;">http://www.stockmarketdigital.com/ipos/ ... -ipo-terms</a>

<a class="postlink" href="http://football.uk.reuters.com/football/news/2012/08/10/21A303C0-E27A-11E1-B413-71ED7F33923B.php" onclick="window.open(this.href);return false;">http://football.uk.reuters.com/football ... 33923B.php</a>

You probably know I'm no fan of the Glazers but being objective, and using the proposed price range of the shares as a guide, they valued the club at $2.65b to $3.3b. Whilst I'm sure they were hoping to achieve the higher end of the range, the lower figure isn't too far away from the $2.3b valuation that a $14 share price suggests.

Incidentally, I'm no financial expert but to my untrained eye it looks that the Glazers own greed may well have impacted on the valuation they sought. Had they continued with the initial plan of using all funds raised to pay down the clubs debt, rather than trousering half the money themselves, surely the business would've been more attractive to potential investors (double the amount of debt cleared, significantly reduce ongoing interest payments AND, for once, look like men of their word is surely better than what's actually on offer).

As it stands, from what I've read many analysts still believe the club's been overvalued so we just need to wait and see until the shares find their level - underwritten or not I think the Glazers really need it to be around the quoted figure..

 

[ABU inc GDR]

On the GM thing, if Ewanick circumvented company spending limits by spreading the cost over various budgets you'd imagine that was against company policy. As such you'd think the company might be able, should they wish to, renegotiate the deal, or simply enter a legal challenge to it claiming it was signed by, essentially, a fraudster. Maybe Uniteds "bumper" sponsorship deal may not end up being quiet as lucrative as they'd hope!

I'm far from an expert on shares, company valuations, expected returns etc, but I really do fail to see the financial rewards to investors in this IPO. With no voting rights of any worth, and no dividends to be paid, the only way shareholders can make money on this deal is if the share price increases and they sell up, am I right? Based on the valuation placed upon United by $14 shares surely it seems highly unlikely any meaningful profit can be made on the shares, especially with Fergies retirement not too far off, and the challenges to United both domestically and in Europe being greater than ever. It just seems idiotic to expect to "win" on this IPO for shareholders.

There are good posts on the general forum covering the IPO. Correct though, the only way shareholders will make any money is through an increase when they sell. The Glazers were forced to reduce the share price from $18-20 down to $14 as there wern't enough takers, the shares haven't floated yet and the market specilaists value the shares at $10. I don't see demand for these shares as the valuations have never been substantiated, this will drive the price down to the $10 value and possibly even lower. Jefferries Inc have underwritten the shares and are controlling the float price (it may have been reduced again for all we know), the market will give the true price but as it's only a 10% and not 100% float it's only a guide to the value of the club.