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Sports IPOs: Buyer beware Add to ...

Manchester United, the dominant soccer franchise in the United Kingdom, this week announced plans to raise $100-million (U.S.) through an initial public offering on the New York Stock Exchange.

The club’s owners, the Glazer family, will retain control with a special class of shares that have 10 times the voting rights of the new stock.

The Manchester club becomes the latest sports franchise to benefit from a large fan base by raising money in the public market, joining European competitors like Juventus FC and FC Porto, as well as previous, temporary forays by the U.S.-based Boston Celtics basketball team and Cleveland Indians baseball club.

But potential buyers should beware: Many similar stocks have seen investors and fans buying with their hearts – enduring significant losses in subsequent trading.

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