Another Record Price For Arsenal Shares!

Well bugger me with a fishfork. The record price for an Arsenal share wasn’t broken for five years and now it’s been smashed for the second time in a couple of weeks.

On 27 March the record reached £17,750, after being at £17,500 since September 2012. Today a share was traded for £18,250.

This nominally values the club at £1.135 billion, though single share trades aren’t really a proper indication of overall value.

To recap my post from a couple of weeks ago: After 2012 the price dropped as low as £14,000 per share in 2014, before slowly climbing again. The reason for the drop was mainly that the two major shareholders, Stan Kroenke and Alisher Usmanov, stopped buying them. Usmanov hasn’t bothered buying since he reached the milestone of 30 per cent of the shares, and though Kroenke was still buying shares offered to him for a while after he achieved a majority, he also lost interest in purchasing more some time ago. There are still other buyers and sellers occasionally, but the market is so small it’s difficult to say what the value of the club is by the latest share price, and equally difficult to predict what the next price will be by looking at recent trades. Buyers and sellers are scarce enough that negotiations can be at an individual level.

Recent rises are probably partly to do with the scarcity of shares, but mainly to do with the perceived value of all Premier League clubs rising as a result of increased income and turnover from TV deals. Good news for Kroenke, as that’s what he’s here for. It’s not related very closely to success on the pitch – also good news for Kroenke, as he’s not much interested in that. However, another reason for recent rises could be speculation that Kroenke might sell, and any purchaser of his stake would likely have to pay a premium and offer the same price to other shareholders. There is no indication that Kroenke wants to sell – and he’s never sold any of his sports clubs, is hardly strapped for cash and sees Arsenal as an asset that will accumulate in value over the years – but there are rumours that buyers are interested. Conceivably if Kroenke thinks it will require major investment to maintain the income levels that have come to be taken for granted with a fully sold 60,000 seat stadium and regular Champions League, then he might consider his best option is to take a profit now. If he sold for £20,000 a share, which is probably the minimum premium worth him even considering, then his profit would be around £410m – it goes up by about £42m with each £1,000 increase in the share price. The potential profit for Kroenke is explained fully here.

The record price, as you can see from this table, was broken 28 times between November 2007 and September 2012, and has now been broken twice more:

Twitter: @AngryOfN5

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2 thoughts on “Another Record Price For Arsenal Shares!

  1. Phil,
    Thanks for the update. On an unrelated matter related to the accounts, i noted for the last 2 years an additional element to the debt has been added called financial derivative instruments. I think this means contracts but no idea who with. They have added around 25m to the debt. Just speculation, but why have they been added to the debt? Is it a means to hide the cash available which has been picked up on for years now or is it money being taken out of the club. I wonder if the latter they relate to any companies that a certain person owns.
    It would be interesting for clarification what it actually is.

    • Not sure what you’re looking at in the accounts – overall debt has reduced year on year by about £6m per annum for quite a few years (the capital repayment on the stadium debt).

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