5. Manchester United's Kick Off
Nearly 32 million shares of Manchester United (MANU) got kicked around on its first day as a public company. That's a lot of action considering the team only put 16.7 million shares on the market.
And Americans complain that soccer is boring.Manchester United priced its IPO at $14 per share last Friday, below the expected range of $16 to $20. The stock finished the day exactly where it started, but more on that in a moment. The IPO raised $233 million, valuing the team at $2.3 billion. Most of the proceeds will be headed directly to the coffers of the Florida-based Glazer family who bought the soccer powerhouse in a highly leveraged deal in 2005. Man U had debt of $661 million at the end of March, causing much consternation among the club's fans who believe it will hamper the team's ability to attract talent in coming years. That said, we're not here to talk debt and we're certainly not so dumb as to get into a shouting match with irate English soccer fans about the long-term effect of leverage on their favorite club's future. Not by a Wayne Rooney long shot. No, what intrigues us about the Man U IPO has been its dramatic drop-off in volume. After racking up huge volume at its Friday debut, the shares traded a mere 2 million times the following Monday and less than 200,000 on Tuesday. Heck, if this pace keeps up then it's eventually going to trade less than the stock certificates Green Bay Packers fans hang on their walls. Sure, we know that high-profile IPOs get an inordinate amount of attention from traders right out of the shoot, especially during dull summer sessions when they are the only game in town. However, there was something devilish going on during the Red Devils' IPO and as CNBC's eagle-eyed Bob Pisani points out, it probably had to with those cherry-picking high frequency traders looking for a quick score at the expense of the underwriters forced to defend the stock. "So they put in bids at the initial price. Every time it goes to $14, there are bids. How many? Well, enough to support it at $14 minimum. Knowing this, high frequency traders come in, buy at $14 or $14.01 confident it is unlikely to drop below $14, and then sell at $14.01 or $14.02. Instant money!" blogs Pisani, who adds that the high frequency bandits were also pocketing rebates along the way from trade-starved stock exchanges overly willing to buy their business. Instant money indeed Bob, and yet another instance of the playing field being leveled against the market's smaller players. No wonder they are giving themselves red cards and leaving in droves.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV