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TheStreet Open House

The Five Dumbest Things on Wall Street This Week: Aug. 17

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.

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