As a post script to my last post, I see the price of an Arsenal share has gone up again today – without any even being traded.

I mentioned last time that market makers, who decide the ‘bid’, ‘ask’ and ‘mid’ prices, had decided for reasons unknown to increase these markers following a couple of shares being traded on 2 March, one of them for a new record of £31,000. Prior to those trades the quoted prices were as shown here:The figure at the bottom is the mid-price multiplied by the number of shares, to give the supposed value of the club.

So if you were selling via a broker they’d offer you the ‘bid’ price, and if you were buying they’d sell to you at the ‘ask’, with the difference being their commission. With the price of Arsenal shares being so high, the commission is large. And with the number of shares available to trade being so small, brokers can’t really keep a stock of them. That means the shares are generally traded on a matched bargain basis, and prices can be subject to individual negotiation.

Arsenal shares are different to those of most companies, firstly because football clubs are different and success is largely down to football itself, which can be very unpredictable, and also because of the combination of high price and low volume. You can wait weeks or months for a single share to be sold sometimes. Meanwhile two billionaires own 97 per cent of the shares and it’s known that each would like to buy the other out. But as with all shares, brokers are contacted by people wanting to buy or sell and if there are more buyers than sellers then the price goes up; more sellers than buyers and the price goes down.

It seems to me that the main reason the Arsenal share price has almost doubled in the last year is speculation that either Kroenke or Usmanov will agree to sell to the other – the rise is certainly not due to performance on the pitch bringing in more income! With the speculation there are more buyers in the market than sellers, so the market makers keep putting the price up. On 5 March it went to a mid-price of £32,500:

Then today, the 7th, it climbed again to £33,500, with no more shares being traded:

This values Arsenal at £2.084bn, which is now a lot higher than the £1.5bn figure Forbes decided Arsenal was worth last time they did their so-called ‘rich list’ of football’s most valuable clubs. For several years the share price indicated a value well below the Forbes figure; now it’s suddenly much higher. What will Forbes do? Who knows – I think they just make it up anyway. They may as well, for all the relevance it has to anything.

Twitter: @AngryOfN5