The Glazer family disclosing its willingness to sell Manchester United (MANU) sparked the club’s stock to its best week ever—a 70% share price rally that added more than $1.5 billion to its market cap in just six trading days. The gains easily made MANU the best performing sports stock of November, pulling the JohnWallStreet Sports Stock Index to an overall 4.6% gain in the month, its second consecutive month higher.
Shares of the Red Devils rallied from $13.03 on Nov. 21 to close at $22.14 Wednesday after an announcement that the Glazers, who control 96% of the voting power of the business, were open to strategic alternatives for the club, including a sale. The price surge is easily the best stretch for Manchester United stock in its 10-year history as a public company. The next-best period was a 51% rally over three months in late 2012, the year late family patriarch Malcolm Glazer took the club public on the New York Stock Exchange.
The recent rally ballooned the club’s market capitalization from $2.16 billion to $3.7 billion, which beats the $3.16 billion price tag put on rival Premier League club Chelsea in its sale earlier this year.
“We continue to believe that MANU’s fundamentals justify a premium to clubs sold earlier this year,” Jefferies equity analyst Randal Konik wrote in a research note by the brokerage last week. “Old Trafford is a much bigger stadium [compared to Chelsea], MANU has global reach over Chelsea, MANU has over 1B followers and Chelsea has only a fraction of that, and finally MANU generates more revenue.”
Konik added that Manchester United’s value is bolstered by “playing in the strongest realm within the current media landscape—live sports.” In an earlier note, Konik called Manchester United the best brand in the world’s most popular sport. According to Sportico’s Premier League valuations in 2021, Man United was worth $4.65 billion, and Chelsea was valued at $3.35 billion.
Manchester United is one of 40 public traded businesses that constitute the JohnWallStreet Sports Stock Index, which closed the month at 1,130, its highest mark since mid-September. However, the 4.6% gain for the Sportico index lagged the broader market; the S&P 500 gained 5.4% in November, benefiting from investors favoring old line stocks in the materials and industrials sectors. The sports stock index is heavy in growth stocks, such as sports betting and sports technology, as well as broadcasters and the handful of sports teams traded on a U.S. stock exchange.
Overall, 29 of 40 companies in the sports index rose in the month, with apparel maker Under Armour (UAA) the second best performer, gaining 36%. UAA finished the month at $9.97 a share, six weeks removed from closing at $6.62, its lowest price ever. November’s rise belies skepticism on Wall Street that Under Armour can return to the growth it once enjoyed, with Morgan Stanley bearishly noting early in the month the company has a higher cost of capital and a “tempered operating model.” Sportradar (SRAD, up 20%), Nike (NKE, up 17%), and Caesars Entertainment (CZR, up 15%) rounded out the top five best performers.
The declining issues in November show that even sports-related stocks can’t escape the influence of Taylor Swift. The bungled sale of tickets for the pop star’s 2023 tour, with Ticketmaster’s failure to restrict pre-sales to specified fans and marketing partner customers, meant millions of buyers all vying for tickets at once, resulting in surge pricing that left fans paying thousands of dollars for nosebleed seats. That has sparked equity-market fears of government action on ticket brokers and ticket pricing, pushing Ticketmaster parent Live Nation (LYV) down 9% in the month and Vivid Seats (SEAT), the other ticket reseller in the JohnWallStreet index, down 10%.
The worst stock in the month was esports group FaZe Holdings (FAZE), which lost 41% to close November at $2.04 a share, just four months after going public by a SPAC merger at $10. FaZe’s chief strategy officer Kai Henry resigned from the company during the month, and the business announced its intention to slash costs as it reported a third quarter loss of $131 million on sales of $14 million. About $116 million of the loss was an accounting charge on swapping corporate debt for equity as part of going public. Betway parent Super Group (SGHC, down 22%) and FuboTV (FUBO, down 23%) were other big losers.
The second straight month of gains for the sports stock index hasn’t done much to unwind a bearish 2022 for stocks. The JohnWallStreet index is down 27% on the year, compared to a 14% retreat for the S&P 500. The benchmark sports index was constituted at 1,000 to start August 2020 and peaked at 1,763 in November 2021. The sports index is rebalanced quarterly and equal weighted, meaning each stock begins each quarter as 2.5% of the index.
