Kieran Maguire: Man United ‘investors are twitchy’ after £827m stock market news
Investors are losing confidence in Man United and their ability to drive profits in the middle of a pandemic.
So says finance guru Kieran Maguire, speaking exclusively to Football Insider about latest the stock market developments involving United.
The Red Devils’ share price has dropped to a one-year low, according to figures posted by Maguire on Twitter on Tuesday (14 December).
The value of the club’s total equity has fallen by approximately £827million since it hit its year-high on 27 September.
Maguire suggests that the threat of Covid-enforced behind-closed-doors matches as well as broader trends at Old Trafford are to blame for the dip.
“Share prices are driven by the market’s expectations of future cash flows,” he told Football Insider‘s Adam Williams.
“The markets expect the club to qualify for the Champions League every year.
“But they also know there has to be a significant investment in the squad, which will tie up cash.
“United are vulnerable to Covid more than the vast majority of clubs because they can generate £110m in matchday per season.
“The share price is driven by expectations in revenues, i.e higher costs. We saw the United cost base rise in their first quarterly report.
“There is the potential for reduced income because of Covid, and the markets are a little bit twitchy.
“Interest rates are going up, which will hit United more than other clubs because they have bank debt as opposed to owner debt.
“When you put all those together, it’s reduced income for shareholders.”
United are currently embroiled in a Covid crisis with 19 positive cases among players and staff.
Their clash with Brentford on Tuesday (14 December) was called off and the club has also postponed tomorrow’s (17 December) game against Brighton.
In other news, medical expert claims Man United stars at “huge risk” amid latest reveal.