Photo: AP Images
Over the last five days, MSG has lost over $100 million in market cap. This is in light of Jeremy Lin signing with the Houston Rockets after the New York Knicks opted to not match Houston’s offer. The Rockets ended up signing Lin for $25.1 million.However, the likelihood that Lin’s signing is the driver in the stock’s steady decrease is low.
On July 2, news broke that Lin might not return to New York, if other suitors were to offer him a back-loaded contract that threatened to detonate the Knicks’ cap situation three years down the road. Yet the stock actually motored 1.4 per cent that day. In technical terms, you could call that move a breakout: MSG’s stock had drifted slightly lower for eight weeks, marking the kind of consolidation that can often portend a big jump in price to new 52-week highs. The stock did in fact hit a new high the next day. But after a big move in the morning, it closed up just 0.1 per cent for the day, bearish action at such a crucial juncture. Turns out that potential breakout on July 2 came in below-average volume.
With Linsanity leaving and MSG’s stock tanking, the storyline of his departure dismantling the stock is certainly a funny one but also probably not true. Below is the company’s stock chart over the past five days.
Photo: Yahoo! Finance