The stock fell out of bed as soon as the Nasdaq opened, plummeting around three and a half per cent. Despite recovering slightly, the price was down 2.2 per cent at the close of play last night, at $12.90.
Some underwriters of the English football club’s initial public offering (IPO), which kicked off on 9 August, were bullish over the shares’ prospects as they released their first recommendation notes on Tuesday. Jefferies was the most optimistic, slapping a $20 target price alongside its “buy” rating.
But yesterday’s market action suggests that investors may be more inclined to believe the bearish side of the argument. Nomura had been more conservative, starting with a $13 target and “neutral” rating.
And Kenneth Perkins of Morning Star in Chicago told City A.M. that the stock’s intrinsic value is little more than $10 per share.
“I wouldn’t recommend buying until it’s below $10 and several risks make it unadvisable to invest in the stock. You don’t get any voting rights so are relying on capital gains,” Perkins said.
The shares floated at $14 in August.