It has not been a good summer for Newcastle United either on or off the field, and last weekend's injury to star striker Alan Shearer has only compounded the misery for the club's supporters and shareholders.
Mr Vinay Bedi, football analyst at stockbroker Wise Speke in Newcastle, said: "It's obviously a blow and I don't think it would have been right for the market not to react. Having said that, the investor holding the stock for the long term is not going to be too concerned." - (Financial Times Service)
It has not been a good summer for Newcastle United either on or off the field, and last weekend's injury to star striker Alan Shearer has only compounded the misery for the club's supporters and shareholders.
After ending last season on a high when it clinched a qualifying spot in the lucrative European Champions League, the club has suffered a string of setbacks.
First, the share price performance since its much ballyhooed flotation in April has proved a big disappointment.
After their debut, the shares fell steadily from the issue price of 135p to 113 1/2p. General unease over football shares contributed to the decline, but a badly handled flotation, a belief that the shares were overpriced on issue and some unanswered questions about the club's move to a new stadium were also behind the poor showing. The shares recovered their losses only to suffer a second setback, in early July, when Mr Mark Corbidge, joint chief executive, suddenly resigned.
The former NatWest investment banker had been appointed to oversee the stock market debut, but had come in for criticism from City institutions and analysts over the handling of the flotation.
A third setback was the recent transfer of striker Les Ferdinand to Tottenham Hotspur for £6 million. Both the player and the club's manager, Kenny Dalglish, hinted strongly that the transfer was made for financial, not footballing, reasons.
It was noted in the City that the club completed the deal just a few days before its financial year-end. This will enable Newcastle - which lost almost £22 million after transfer payments last year - to show a handsome profit when it publishes its maiden annual results as a publicly quoted company.
Suggestions that the club was being forced to sell players because it needed the money have not gone down well with fans. The Ferdinand departure proved even more unpopular when Shearer was ruled out of the game for at least three months with an ankle injury.
Analysts were divided over whether the news of Shearer's injury merited such a fall in the share price.
Mr Vinay Bedi, football analyst at stockbroker Wise Speke in Newcastle, said: "It's obviously a blow and I don't think it would have been right for the market not to react. Having said that, the investor holding the stock for the long-term is not going to be too concerned." - (Financial Times Service)
