Man United shares ‘will continue to decline’

A RECORD number of investors are betting against Manchester United recovering from its current troubles and 10% of investors in the company’s publicly traded shares anticipate a decline in its share price.

Short interest — the level of shares being loaned to investors who will pay for them at a later date — is at a record high of 1.97% of total Manchester United shares, according to data from financial information services company Markit.

This is more than a 10th of the 19.25% of Manchester United shares publicly traded on the New York Stock Exchange, where the company is listed.

Shares in the club have lost 14% of their value since early December as Manchester United’s stock market performance has mirrored its troubles on the pitch.

Bookies see the team as being unlikely to qualify for next season’s Champions League, a major source of revenue.

Short-sellers — investors who borrow shares and then sell them in the belief that they will be able to buy them back in the future at a lower price, thus making a profit if a company’s shares decline — believe that Manchester United’s stock market value has further to fall.

Hedge fund guru Crispin Odey took out a $22-million (about R234-million) short position on Manchester United early in December when shares were above their current levels.

Manchester United listed on the New York Stock Exchange in August 2012 at $14 a share, valuing it at about $2.3-billion and making it the most valuable football club in the world. The shares peaked at more than $19 in May last year, shortly before Sir Alex Ferguson announced he was leaving after more than 25 years in charge of the team. —©