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IPO – Good or bad or a little bit of both?

The one thing the Glazers are good at, is getting something for nothing or getting someone else to pay for it. This time they will use the New York stock exchange and while they’ll be selling part of one endless holding companies linked to United, they will win.

The Glazers still have complete control and nothing will be paid out to share holders. The shares for starters come in two classes with different voting rights. Malcolm of course has put in a catch and he will still own the class B shares which have ten times the voting rights of the class A shares. Anyone thinking of a classic style takeover can forget it and if you were thinking some nice money could be made, there are no dividend payments.

For investors and possible shareholders the incentive doesn’t seem very high. Other than hoping the shares will increase in value and having a piece of paper saying you own a share in the club, this is nothing like the days of the PLC or when the bond was issued.

During the PLC your vote was the same as everyone else’s per share and you got a dividend although small. With this new share issue you won’t get any of that. For the Glazers this is great. They will have full control and pretty much get free money for paying very little out. For the club this is also good, instead of paying 9% interest on bond debt, the Glazers will instead have shareholders who will be paid nothing and they will have put £tens millions into the club. All this money will then go to pay off the debt which will inturn reduce the interest the club pays out.

The debt currently stands at £423m and the current share offering in New York is believed to be worth around £64m ($100m). That would take the debt down to around £360m reducing the interest payments from just under £40m to around £32m. If the share offering  is successful it could lead to a greater amount of shares being released but anything more than this is just speculation and guess work.

The document released by the club says the share offering is pretty much to tackle the debt problem. Any speculation on future share releases to either work out the value of the club for a sale or just to reduce more debt are just that, speculation.

For the fans of the club, there is no advantage to be had other than seeing a little less money flow out the club.

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6 responses to “IPO – Good or bad or a little bit of both?”

  1. Matt says:

    This is seriously wrong. The Glazers are preying on our loyalty to United. No dividends, less voting rights.. If this were any other company, no one would buy any shares. But because we want to see the best for our club, we take the risk of losing money with very little, if any, gains. I don’t know whether to laugh or cry at how outrageous and devious this scheme is.

    I, like many others, truly care about this club, so is it wrong to want this plan to fail? I can’t stand the idea that there will be many United supporters, because of their dedication to the club, who will buy shares in United taking on board the inherent risk of doing so. All to service someone elses debt. To me this is eerily reminiscent of the GFC when American companies packaged debt and sold it off around the world. Except in this case there are no dividends to rely upon.

    Fuck the Glazers

    • Lunar_love_86 says:

      @Drasdo
      “Manchester United IPO – what it all means http://t.co/qzZ1syb8 – separating the reality from the myth.”Good read!
      This is a good read. Best only after Andersred

    • RedManWalking says:

      “If this were any other company, no one would buy any shares.” – I would like to counter this particular comment, Matt. This type of ownership is pretty common in the US. The Facebook IPO and Google IPO were of the same kind. And plenty of people bought those shares because they knew that the share value of these companies can grow. The same can be said of United. Manchester United, the brand, has great potential to grow and people will buy it for that reason.

  2. Matt says:

    This is seriously wrong. The Glazers are preying on our loyalty to United. No dividends, less voting rights.. If this were any other company, no one would buy any shares. But because we want to see the best for our club, we take the risk of losing money with very little, if any, gains. I don’t know whether to laugh or cry at how outrageous and devious this scheme is.

    I, like many others, truly care about this club, so is it wrong to want this plan to fail? I can’t stand the idea that there will be many United supporters, because of their dedication to the club, who will buy shares in United taking on board the inherent risk of doing so. All to service someone elses debt. To me this is eerily reminiscent of the GFC when American companies packaged debt and sold it off around the world. Except in this case there are no dividends to rely upon.

    Fuck the Glazers

    • Lunar_love_86 says:

      @Drasdo
      “Manchester United IPO – what it all means http://t.co/qzZ1syb8 – separating the reality from the myth.”Good read!
      This is a good read. Best only after Andersred

    • RedManWalking says:

      “If this were any other company, no one would buy any shares.” – I would like to counter this particular comment, Matt. This type of ownership is pretty common in the US. The Facebook IPO and Google IPO were of the same kind. And plenty of people bought those shares because they knew that the share value of these companies can grow. The same can be said of United. Manchester United, the brand, has great potential to grow and people will buy it for that reason.