Manchester United shares lost nine percent of their value on the New York Stock Exchange, falling $1.53 to $15.16 at the close of trading on Thursday. The one-day drop was actually larger than the instant 4.5 percent decline the stock faced when former manager Alex Ferguson announced his retirement.
While there was no obvious reason for the sharper decline Thursday, some reports blamed United’s link with $27 million Benfica defender Ezequiel Garay as the cause. As financial Web site Benzinga pointed out out, “the large cash disbursement for the defender does affect Manchester United's finances, who only reported cash of $113 million as of the last filing."
At the time of Ferguson’s retirement announcement, analyst Ken Perkins noted that a sports team stock like Manchester United, "probably has a lot of speculation built into it,” he said. “It may not trade a lot on fundamentals, but may trade on things like who's the new manager, how the team performs. It's hard to say how other investors will feel. That's why in our view stock like Manchester United is risky."