The Bottom Line: iSportConnect Business Index
February 16, 2023
Welcome to this week’s edition of the iSportConnect Business Index, after last week’s gains the Index has generally struggled this week, with only seven of our Top 30, having a positive week.
Let’s have a deeper dive into the stories of the week then:
Manchester United – +12.973%
You can’t keep them out of the news and since our last Index, the Reds beat Yorkshire rivals Leeds United 2-0, but that isn’t why their share price is on the up. Last Thursday it was announced that a group from Qatar would be interested in buying the club and their share price shot up as a result.
The deadline for submitting bids to buy the club is tomorrow, Feb 17, and suitors from the US, UK, Saudi Arabia and possibly a certain Elon Musk might be preparing bids. It is thought that the asking price will be close to $6bn so why is their market cap stuck below $4bn, at $3.89 bn. Interestingly in the first edition of the Index back in January the market cap was at $3.72 bn. The interesting angle is that since the Glazers announced a formal sale the share price has gone up x2.5 times. I still think there is upside.
Adidas, Puma and Under Armour all down
The whole sector has taken a hit this week. Last Friday, Adidas announced they were severing ties with Yeezy. It is reported by Bloomberg that they are sitting on between $1.2 and $1.3 bn worth of Yeezy stock ,and the dispute between Adidas and Yeezy may even cause Adidas to have an operating loss for 2023. From last week they are down 9.077%. These are really big moves.
Under Armour are down a huge 13.068% from last week despite a better than expected earnings report which showed the company beating earnings and revenue predictions for the holiday period. However the sell-off that occurred on Thursday was caused by investors being worried by a sharp increase in unsold stock that could have an effect on the company’s gross margin in the coming quarters.
Betting brands struggle
More bets than ever were placed on Sunday’s Super Bowl, by the looks of our companies share prices most of them were on a Kansas City win. FanDuel reported taking 50,000 bets per second at the game’s peak. Fascinating that despite this most of the share prices were lower. too much already baked into the price?
Our friends at DraftKings had to pay out $2.68 million to one lucky punter, but given the fact they staked a cool $1.68 million, I doubt they are short of cash.
Let’s take a look at this week’s Index: