Manchester United made a disappointing debut on the New York Stock Exchange on Friday, even after opening at a discounted price, with enthusiasm for the Glazer family's English soccer team overshadowed by its debt load and financial track record.
Many had expected that fans of the world's most famous soccer club would snap up shares, leading to a pop in early trading, but that didn't materialize.
Some analysts had warned that the initial public offering was overvalued, particularly since the club is debt-ridden and the Glazers retained almost total voting control over the team.
The Glazer family also owns the NFL's Tampa Bay Buccaneers.
"There was a lot of wing flapping, but not much flying today," said John Fitzgibbon, the founder of IPOScoop.com. "It's reflective of the overall IPO market. They may hit a couple of road bumps, but the deals are getting done."
Manchester United shares were flat at $14 in midday trading on the New York Stock Exchange, the level they were priced at by the underwriters late Thursday.
The stock, traded under the MANU ticker symbol, had been expected to be sold for between $16 and $20 per share.
The $14 per share price still valued the club at $2.3 billion, slightly higher than the record $2 billion paid for the Los Angeles Dodgers baseball team earlier this year.
The 134-year-old soccer club expects to make $110.3 million from its offering of 8.3 million shares. It will use $101.7 million to pay down senior notes. The Glazer family is selling another 8.3 million shares separately.
The family's 2005 leveraged takeover was valued at $1.47 billion, much of it borrowed. United carried $666.2 million in debt as of March 31. It had no debt when it was bought by the Glazer family in 2005.
Family patriarch Malcolm Glazer is the Bucs' owner and president and CEO of First Allied Corp., a holding company with numerous business interests. Sons Avram and Joel are co-chairmen of Manchester United. Sons Bryan and Ed are on the team's board of directors.
After the stock offering, the Glazers will keep control of the team through Class B shares that have 10 times the voting power of the stock sold to the public.
Manchester United is one of the most renowned sports teams in the world. It claims 659 million followers and 26.9 million Facebook fans. Half of its fans are in Asia, where its games are televised and its replica shirts and other products are huge sellers. But analysts are more skeptical of the team, known as the Red Devils, as a financial commodity. It is not a high-growth company such as a tech startup, but like some tech startups, it is heavily in debt.
Manchester United is hoping to expand its lucrative sponsorships and licensing deals. Earlier this month, it announced a $559 million, seven-year shirt sponsorship agreement with Chevrolet. But financial performance has been choppy.
The team expects to report a loss for the year that ended June 30, excluding a tax credit, with revenue down 3 percent to 5 percent.
Also, the broadcasting and ticket revenue is largely dependent on how far the team goes in English and European cup competitions.
The IPO market has been chilled since Facebook's disappointing debut in May.
Another public offering expected from Carl's Jr. parent CKE Inc. on Friday was postponed.
Tampa-based Outback Steakhouse owner Bloom-in' Brands debuted below its expected offering price Wednesday.
On Friday, shares rose 18 cents at $13.67 in morning trading, 24 percent higher than its IPO opening price of $11 per share.
One analyst said the flat opening is a signal that individual investors, who are typically attracted to well-known name brands on the market, are paying more attention to valuation and price.
"The bigger story confirms that individual investors felt so burned by the market — having been burned twice, by the financial crisis and then by Facebook — that they're not willing to get burned again," said Sam Hamadeh, CEO of PrivCo LLC, which researches privately held companies.