Roman gave up over £2bn in debt owed by Chelsea, its the only reason the takeover bid was successful
Sir Jim Ratcliffe: I want to buy Manchester United | Will make a bid for the club [Telegraph]
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Roman gave up over £2bn in debt owed by Chelsea, its the only reason the takeover bid was successful
Ooph $2 in 7 days, big ask.
5 weeks no? The original tweet says 21st October.
Yeah mate, I mentioned this in the other thread actually yesterday. Here's what happened:
United have an earnings report this Friday before the market opens, so sometime before 2:30pm UK time. What usually happens before a company reports earnings is the stock gets run up and then drops significantly just before the market closes on the day before earnings, we'll probably see this happen on Thursday night. It's called 'playing the earnings', and it's incredibly stupid to hold a stock through earnings if you don't plan on holding for years.
That tweet in-particular is referring to someone dropping $230k on stock options that expire next month for a stock that's at $14 but they believe will move closer to $17 by then. A positive earnings or news catalyst would do that.
Again though, what's unusual is the amount of volume Man Utd is getting this week. Large volume spikes on the options and the stock commons. So it's one of three things:
1. Traders are playing the earnings and nothing significant is going on right now.
2. There's a positive earnings report on the way. (insider trading)
3. Someone knows something about a new investor that will be mentioned during the earnings call on Friday morning (insider trading)
As always, we'll know by the weekend what's really going on.
Someone put in a bid of 0.23c for 10k call options for United stock at $17.
In simple terms, someone wants to buy an option to be able to purchase United stock for $17 by 21st October and is willing to pay 23c for each option.
An option covers 100 shares, so we're talking about 1 million shares here or 17m value. For the buyer to make money, they'd need the stock to be at least 17.24 by that date (price of 17 + premium of 0.23c). Given where we are (stock is mid-15s), it's a safe bet someone thinks there should be positive news soon.
This can also be speculation though. If the stock hits 16.5, the option is likely to still jump even if it won't be in the money yet (no money to be made buying at 17 when the market price is 16.5).
For a stock like United's where daily volume is about 0.5 million, it's definitely eyebrow-raising.
Edit: didn't realise we have earnings coming up, that explains a lot.
Agree with most of this, but stocks don’t always tank right before (or after) earnings and not stupid to hold through earnings. It’s all about expectations. Stocks turn on earnings performance relative to consensus Wall Street expectations. If you think earnings will be better than expected, you’d want to hold for the pop. Plus your post contradicts itself with regards to the holding period - if “usually” the stock runs up before earnings (which are quarterly) then why would you need to hold for years when there will be another run up in three months?
As I mentioned, it's common for momentum or day traders to follow the volume into the stock on the run up to earnings. A lot of people don't know or care what the stock is, they follow the volatility as that's where money is made, you can't make money on a stock that only goes sideways. Those traders will sell before earnings so they don't get left holding the bag if the earnings are a surprise in a negative way. We're talking about traders here, not investors, there's a difference.
To answer your final point, if you're holding something like Amazon or Google from $10, you don't care what it does intraday or quarterly. You've been holding for the bigger moves that happen over months and years. Man Utd isn't Amazon or Google, you don't want to hold this stock long term, this is as good as it gets for this stock.
Isn't it 0.23 per option and 10k options bought? That would be 2.3k and not 230k on stock options or am I missing something?
100 shares per option
Yeah but the 0.23 are for the option so 2.3k for options covering 100 shares each
Maths is wrong way around.
One option is 23 cents. You get 100 shares per option contract, so it's $23. The investor bought 10,000 options so you x $23 by that to come to $230k value
Owns nothing of the club but is earmarking future employee's, makes sense
It makes absolute sense to start seeing who is ready and available for something that you are looking into.
Tosh.
Any sensible business man is going to have a plan ready in place before buying a club... surely?
You don't spend 4/5 billion pounds and then say now what?
Is this sarcasm? Or do you expect him to take over without a single clue who will be his team to run it? Its not the type of job where you put an ad in the paper.
Yeah the ideal person as owner and a proven DOF to boot is definitely too good to be true
Every single potential buyer will have people lined up
Sir Jim saving United, the Atlantic Salmon and the rest of it.
He's getting decent amount of favourable publicity from this without actually having bid. A cynic would say that's the point. Like Knighton but less care in the community vibes.
I dunno if you want to buy a house do you make an offer or talk to the press about the type of furniture you'd have if you decide to buy it.
Billionaire businessmen hate publicity though, of course
I dunno if you want to buy a house do you make an offer or talk to the press about the type of furniture you'd have if you decide to buy it.
Billionaire businessmen hate publicity though, of course
Sounds awesome but unfortunately good things never happen. Would still be shocked to see those leeches sell
Less talk more action. How about somebody actually comes to the table with a legitimate offer and tests the Glazers resolve. It’s all well and good saying the clubs not officially for sale but you never really know until you make a concrete offer.
The price is 0.23 per option and there are 100 shares per contract so that's 0.23 x 100 = $23 per option. Then times that by 10,000 = $230k. It's complicated at first, like everything in the stock market.
You think the stock is moving like this because nothing is happening?
No the stock is moving because of the idea of something happening, whether something is seriously happening or not is another story.
Laughable how some people are in here with the authority how multi billionaires should aquire business. Maybe they know a bit more than you
Someone did not put down $450k two weeks ago and $230k yesterday because they like the idea of something happening. The rich stay rich because they have impeccable risk management when it comes to investing their money. That money turns to dust at the end of this month unless the stock rises considerably before then. There's still every chance this is manipulation but we'll know soon.
Isnt it the law that the Glazers have to come and state explicitly that the club is not for sale if its not? As you say they are manipulating the market if they stay silent.
Or rather insider information that only they're privy to
I actually have some aristocratic blood in me. I mean they all give blood don’t they, and I’ve had loads of transfusions in my life. So chances are I’ve got quite a lot of nob in me.
Thanks yeah I see now. Well that's a lot of money at stake!
Bloomberg has already reported that a stake in the club is for sale and the Glazer's haven't responded to that news article. If a stock goes wild on that rumour/news then a stock can get halted until management release a PR to explain why it's going wild. They don't have to address rumours or stories like that unless that's suspicious activity, right now it's just unusual but perfectly legal.
I don't think it would be the Glazer's manipulating the market but most likely the suitors.
Whack a big bid on the stock, wait two days, go to the press, tell them you've found the guy who's going to run things when you buy the club, watch the stock pop, take your 20% profit on $230k. Easy money. Meanwhile the Glazer's can't deny anything because they're actively looking to sell.
Or rather insider information that only they're privy to
There's always that also!If anything is going to happen with this, surely it needs to happen in the next 10 months or so right
Takeovers can take a long time, it's ultimately down to the selling party and how quickly they want out and the buying party to prove they have the money. Chelsea's was super fast and there's no reason United's wouldn't be.
The Glazer's don't have to accept any offers below their asking price though, that could make the process lengthy.