This is getting ridiculous and there's been no similar movement in other football shares.

-- Anonymous, January 26, 2001

Answers

Wow! last time I looked (awhile ago mind!) it was roughly 50p....when did it drop so much? does the city know something we don't?

-- Anonymous, January 26, 2001

Dunno, Gav, but it's very weird...it's been dropping steadily since the annual report but more dramatically the last few days....

-- Anonymous, January 26, 2001

I know cash flow and debt repayment are a BIT of a problem but surely not that bad? our revenue stream is increasing rapidly, league position isn't bad and we haven't been wasting money on players with the current transfer uncertainty....

I might just go out and buy some....

-- Anonymous, January 26, 2001

Been digging around and can't find any obvious specific reason for the recent fall in the share price.

To answer Gav questions about the City - the City essentially abandoned NUFC in the aftermath of "The Scandal", when Sir Terence Harrison resigned as Chairman after only a couple of weeks in the job, and the other non-Executive Directors also quit. This was basically an indication that the City had no confidence in the company - which is really a pseudo-private company - being run as a public company for the benefit of all its shareholders.

The only significant institutional shareholder now is Legal & General with 3.6%.

I can only assume the present situation is being caused by there simply being no buyers for what looks like a normal volume of stock being sold. This results in the market makers marking down the price in an effort to move the stock they accumulate.

I read recently that NTL have financial difficulties, so it's always possible they could be trying to off-load some of their shares. However, it is highly unlikely they would dribble shares into the market like this.

Whatever the underlying reasons for the share sales, they are leaving the company increasingly weak as the price drifts inexorably down, and some measures to bolster the shares appear to be required.

-- Anonymous, January 26, 2001

What can they do apart from making investments themselves to make it look as if investment is happening in the club? Freeze share dealing?

-- Anonymous, January 26, 2001

Thanks for that Clarky....

Just one more question....it's probably a bit simplistic so bear with me :)) why does the company become weakened if the share price drops?

-- Anonymous, January 26, 2001

Gav,

They obviously become easier to takeover - IMO, an unlikely scenario given the weak financial position and high level of debt. I guess it also weakens their ability to raise more finance in the public markets. DB,

What they can do is get out and promote the company to the investment community with some positive spin around the stadium expansion and its excellent revenue-generating facilities, successes in youth development, the developing playing situation and prospective European qualification, etc., etc.
Management could also consider personally buying some shares which eliminates some of the 'float', and also projects their confidence in the Company to the investment community. The worst possible thing to do in this situation is sit on your @rse and hope it goes away!

-- Anonymous, January 26, 2001

If the share price is driven down too low we could get some twat like Knighton juggling his balls in front of the Gallowgate.

-- Anonymous, January 26, 2001

Surely the markets can tell if the directors are falsely inflating the share price by buying stock and will steer clear even more as it looks even worse?

-- Anonymous, January 26, 2001

Hmm I thought it might just be a case of making the club easier to take over.....from a fans point of view that doesn't necessarily weaken us :)) and we might get someone who knows how to run a business ;)

-- Anonymous, January 26, 2001

DB,
Directors buying shares is one of the best things they can do to support the share price - other than making profits that is!

It is not artificially inflating the share price - they are as free as any other punter to buy shares - with their own money of course. Investors will assume they are not entirely stupid, and wouldn't be investing their own money if the prospects for the company were bad and the price was likely to continue to fall.

-- Anonymous, January 26, 2001

Just noticed - there was a 100,000 share trade 'after hours' yesterday, and 2 x 50,000 sales. These are not insubstantial sales, although still small in the overall equation.
However, it does means the market makers have to move 200,000 shares in a weak market - ie. some punters have to buy these 200,000 shares before the price could realistically move upwards. For reference, the total volume traded today is about 40,000 shares.

-- Anonymous, January 26, 2001

<<>>

You know what they say about assume, it makes an ASS out of U and ME!!

-- Anonymous, January 26, 2001

it must be a BUY at 35.5p, I was told it couldn't go much lower at 105p and again at 70p, so it MUST be time to buy now, I mean to say they can only go down another 35.5p !!

-- Anonymous, January 26, 2001

I've been thinking of buying a few NUFC shares for a while, more out of sentimentality than any conviction they'll make me money. On current form they'll be worthless sooner or later. It is interesting to note that the city seem singularly unimpressed with how NUFC is being run. I don't blame them.

Can anyone recommend an inexpensive way of buying a v. small amount of shares (from outside the UK) without getting stung on commission? If so I'd be very grateful for any info. Dougal, is this your territory? Any advice?

-- Anonymous, January 26, 2001

200,000 shares sold yesterday? That must be Rik, funding another domain purchase!

Actually, MacB, I was thinking along the same lines. If I had any readies at the minute, I could be tempted. However, priorities lie elsewhere right now - like buying a place to live in Toon.

What's the worst that could happen Clarky? Apart from those who have already invested losing their investment? If it did put us in a position for a takeover, then it would depend on who bought.

As a matter of interest, how many shares are there in total? And how many do the board members own (approx)? Could the Halls be pulling out?

-- Anonymous, January 26, 2001

Screacher,

There are 145 million shares.
FS & his companies own ca.16%. The Halls (including CHD and an offshore company) own 48%, including 7% that is owned by the CHD Pension Scheme - I just bet the pensioners are just thrilled with this particular investment!
NTL own 9.8% and Legal & General 3.6%. Someone called L. Hatton owns 3.6%.

It's not easy to tell what's going on, but I'd be very surprised if the recent selling has anything to do with the major shareholders. It would be extremely unusual for them to dribble shares into the market like this, as they know precisely what happens - the share price drops like a stone. If they wished to sell, a private sale would be arranged at a negotiated price.

As I said earlier, I think the problem is being created by smaller shareholders selling into a market where nobody wants to buy the shares - so, the market makers have to keep marking down the price to offload the shares they have acquired.

What's the worst that can happen? Not really sure. The shares should reach a level where they create some general market interest - of the kind we've seen indicated on here.

A predator could come along - this would represent a total unknown, could be good, but could also be really bad. However, given the financial situation I personally think this is unlikely.

The Board really should be responding to this situation, and seeking to boost the shares, or at least attempting to put a floor beneath them, using all measures available - as discussed earlier.

Technically, the Board could use Company assets (ie cash) to 'buy-back' some shares to reduce, or eliminate the float. However, this is usually something done by Companies that are relatively cash-rich - which NUFC certainly are not.

One thing that could happen if the shares drift down far enough, is that the Halls & Shepherd could take the Company private again by making a general offer for the publicly held shares. I have to say that this makes perfect sense to me. It could now be accomplished for perhaps as little as £20-30 million. This would take the Company out of the City glare, and enable them to sort out the playing side, reduce the level of debt, and reposition the Company over several years for a sale, or even a re-flotation. If successful, a lot of a money could be made using this strategy - yet again!

-- Anonymous, January 26, 2001

So, even tho' 200,000 shares looks a bliddy big number, it is a drop in the ocean compared with 145M, and on current prices, worth only £71K.

Interesting that you suggest the Hall's and Shep could buy the public stock. Is this something which could be forced? Strange if it were. I presume the remaining 20% of those shareholders not included in your breakdown are fans, who probably bought at issue and would lose a huge (in their terms) amount of money. Sure, it could get worse, but not a lot! Would the corporates (excluding Halls and Shep) be more inclined to sell? I dunno - I guess it depends on what they bought at and how they see progress (!) in the future.

If events went the way you suggest they could (re-privatisation) I wonder what the press would make of it (and would I care??)? As you say, they could make a big bundle and no doubt some hack would start a story. I can imagine the headlines and text at this minute!

Thanks for your explanation - so when are you and Rik buying up the rest of shares? I can just see the next shirt sponsors: Al-k-traz in conjunction with Rik's Electrix and NTLSports. Mind, we'd need somebody like Mickey Quinn to get that across the front!

-- Anonymous, January 26, 2001

You're certainly right Screacher in thinking a buy-back would be likely to result in a lot of unfavourable publicity in that Joe Public would be seen to have lost out big-time for supporting the flotation - with the major shareholders being the only ones who would have benefitted financially. However, it could conceivably get to the point where such action would represent the best, if not the only way to protect the value of their stake in the business.

-- Anonymous, January 26, 2001

Has anyone seen todays McNallys colum "Soccer shares damage your Wealth" in today`s Sunday Mirror,interesting table of soccer shares composed by Oliver Butler of Soccer Investors magazine , gist of message to me appears to be, fans investing will not make money in future but will have bigger say in running of club.

Football analyst David Conn,author of The Football Business wites fans have been exploited by the share issues which made fortunes for a handful of directors and chairmen but left supporters with losses. They purchased their shares cheaply but the fans paid over the odds at flotation. What struck me in the article is that success is not a guarantee to a increase in share prices??.

Interesting to note that the two big 96-97 issues by Spurs and Man Who did bring handsome profits to investors, its being downhill ever since. The above is nowt to do with me , might help the debate, I always thought FINANCE was a Scandavadian gay, well at least its unplanned and still better than those 2 divvies on tv

-- Anonymous, January 28, 2001

Haven't seen it, but the points you've quoted are very accurate. A few people were cute enough to spot the opportunity and have made a lot of money from the football bubble - at the cost of the everyday punters, and the 'bubble' has well and truly burst now.

-- Anonymous, January 28, 2001

I can't be Arsenaled to check Clarky's figures, but from memory, the %age of fans likely to have bought Toon shares is pretty low (OK, I checked and it's roughly 20% - ie. less than 30M shares. But still a reasonably large number - especially when you think that many fans who bougt at the top may have baled out the lost cause (Christmas presents, leaking roof and aal that).

So 30M shares at least in "common hands". A rip off perhaps, but I bet they all got a kick (no pun intended) out of owning part of their football club.

-- Anonymous, January 28, 2001

I believe it was close to 25% Screach. 25% is a lot of punters who - albeit willingly - paid ca.£50 million to acquire their shares.

I would accept that most of those punters bought them to tuck away for sentimental reasons, and to simply own a piece of "their Club".
However, I also believe that few of those punters are total fools, and will have believed not unreasonably that they were buying an asset which would appreciate over an extended period - NOT one that would be worth 25% of what they paid for it three years later.

And where did the £50 million finish up? Yes, precisely.

-- Anonymous, January 28, 2001

Hold onto your hats - we're up to 36.5p!

-- Anonymous, January 29, 2001

So, are we to conclude that the Halls and Shep have been following this thread and are taking Clarky's advice??

-- Anonymous, January 29, 2001

Well..it's early days and I'm not sure what the equity analysts will be saying...

-- Anonymous, January 29, 2001

Sell, sell, sell!

-- Anonymous, January 29, 2001

It's reckoned that Keith Gillespie's had a punt. (At least I think that's what I overheard).

-- Anonymous, January 29, 2001

We've stablised. Closed at 36.5p again! Similar lack of movement for Villa, Spurs, Leeds and Man Utd. The SMB have gone up by 25.00.

-- Anonymous, January 30, 2001

Before I go, I know you all look forward to the day's share price. It's gone down to 36p. Some strange trades today - the smallest being for a value of £19.

-- Anonymous, January 31, 2001

...yeah Dougal, but it was worth £76 just four years ago.

As they say - "always remember, Toon shares can go down as well as down!"

-- Anonymous, January 31, 2001