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SBD Global/December 13, 2013/Finance

Hedge Funds Betting Against ManU Following Early-Season Premier League Struggles

ManU has had a "dismal start in the Premier League this season -- and some hedge funds are betting that their shares will have a similarly rotten run of form," according to Robinson & Blitz of the FINANCIAL TIMES. Odey Asset Management, "founded by hedge fund manager Crispin Odey" and one of the U.K.'s "most prominent funds, has revealed a short position" worth about $5M in the football club. Shares in ManU "have enjoyed a modest rise since the club floated at $14 in New York last summer." The shares have risen by "about a fifth over the past 12 months to just under $17" (FT, 12/12). BLOOMBERG's Ben Priechenfried reported United's shares, "which first started trading on the New York Stock Exchange in August 2012," closed at $17.24 on Dec. 5. The shares rose 1 cent to $16.98 Wednesday, and have gained 21% "so far this year." In a "short sale, traders bet stock prices will fall by borrowing shares and selling them." Traders "plan to buy back the stock at a lower price, return the shares to their original owner and pocket the difference as profit" (BLOOMBERG, 12/12).

FACING DOUBTS: In N.Y., Alexandra Stevenson reported "the club has experienced steady growth since its debut at $14 a share." With a "strong brand and hundreds of millions of fans around the world, the club reported record revenue" in '13. In its latest quarterly results, ManU said that its sponsorship revenue "had risen 63 percent, compared with the period a year earlier." Odey is "not the only investor to turn bearish" on ManU -- data collected by Markit showed that 5% of ManU's stock is "out on loan, a proxy indicator for how much is being shorted" (N.Y. TIMES, 12/11).
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