United shares rise after Moyes exit
3:26pm Tuesday 22nd April 2014 in © Press Association 2014
David Moyes' sacking by Manchester United inspired the club's share price on the New York Stock Exchange to climb sharply to its highest point since Sir Alex Ferguson's retirement last May.
The shares had slumped in value on Monday when reports began surfacing that Moyes was set to be axed.
But the official confirmation of his departure was followed by a spike in share price up from 17.72 US dollars to 18.78 dollars at the close of trading, a 5.98 per cent rise.
Analysts believe United's owners, the Glazer family, had reached a point where the team's poor performances were threatening to impact on the club's finances - the anticipated new deal with Nike has been much-delayed.
The decision to axe Moyes and appoint a new manager appears to have won the confidence of investors - perhaps in the belief that the Nike deal will now be confirmed.
London-based financial analyst Andy Green, who writes a blog on football finance and advises the Manchester United Supporters' Trust, said: "It's telling that there was a level of underperformance the owners could tolerate and a level they couldn't and it's interesting where that level was.
"You can have transition but decline is a different thing entirely and Nike would have not wanted to announce a huge new sponsorship deal while the situation - and the football - has been so dire."
More than half of the United shares on the NYSE - though only 5.5% of the club - are owned by one American investment firm. It was revealed in March that Baron Capital had acquired 57% of the shares - a good investment strategy in the light of the recent surge in value.
United's debt was reported by the club in September as being £389.2million, costing £71million last year in debt servicing. According to Green, the £71million costs means that the total cost to United in interest, fees, bank charges and debt repayments since the Glazers' 2005 takeover of the club now stands at £680million.
United are now valued at around £1.95billion - 3.3billion US dollars - and the single day's rise in the share price has seen the total value of the club rise by just under six percent, or around £110million.
The highest price shares have reached in the last 12 months was 19.18 US dollars last May, after United had won the league title and when Ferguson was still in charge.