Most investors will find it hard to draw any similarities between Apple Inc. (NASDAQ:AAPL) and Manchester United PLC (NYSE:MANU) a soccer (or is it football) club in England. Interestingly, both companies have more in common than you can imagine. For one, both companies seem to have had the seemingly bad luck of losing the men that have been most instrumental to their success, death in the case of Steve Jobs and retirement with Alex Ferguson. Secondly, both companies have a degree of resiliency that keeps them afloat regardless of who is in charge. Thus, in this article I want to draw some parallels from Apple Inc. (NASDAQ:AAPL) and Manchester United PLC (NYSE:MANU) and tell you why Manchester United will rise after Alex Ferguson much in the same way that the Apple stock rose after the demise of Steve Jobs.
Manchester United Shares debuted on the New York Stock Exchange almost a year ago in an IPO that though not spectacular is not obscure. The shares debuted at $14 apiece instead of the forecasted $16, rose to $14.05 and then dropped back to close at $14. A little over a year later shares are trading around $18 apiece and Manchester United PLC (NYSE:MANU) is now the most valuable football club in the world as $2.3 billion. If you go down memory lane, you will also discover than Apple’s IPO was less than spectacular, with Massachusetts regulators terming the IPO as “too risky” and prohibiting individual investors from buying Apple IPO shares. Today, Apple Inc. (NASDAQ:AAPL) is currently valued at over $400 billion.
The Midas touch
The current level of success of both Apple and Manchester United PLC (NYSE:MANU) can be attributed largely to Steve Jobs and Alex Ferguson’s charisma, drive and visionary acumen respectively. Jobs returned to Apple Inc. (NASDAQ:AAPL) in 1996 when the company was struggling to define its identity with the Mac and then created a market that revolutionized mobile computing. Interestingly, Ferguson was also appointed manager at Manchester United in 1986 at a time when the club ended the season in the 21st position on the table.
However, a series of decisive management decisions and foresighted innovative practices left Apple with a $350 billion valuation at the time of Steve Jobs’ demise. Ferguson was also able to lift Manchester United from the rut to be rated as one of the wealthiest sports clubs and of course the most valuable sports club in the world.
In fact, a little data crunching shows that Ferguson had 1,498 games in charge, only 267 defeats; 527 Premier League games won – at least 161 more than any other manager. In the last 27 years of managing the club, Sir Alex has led the club to winning 38 trophies, this includes; 13 league titles, 5 FA Cups, 4 League Cups and 2 Champions Leagues.
What happens when the Midas Touch leaves?
Speculations about the state of Steve Jobs’ health had often had a negative effect on the share price of Apple Inc. (NASDAQ:AAPL) when he was alive. Thus, it is not surprising that the market also reacted in a frenzy that saw the share price of Manchester United falling 5.5% in the wake of the announcement of Ferguson’s retirement.
Manchester United PLC (NYSE:MANU) seems to have an understanding that it has a tested and trusted recipe in managers who have the patience to build not just a team but also a club over time. Thus, its choice of David Moyes who has remained consistent at Everton FC in the last 11 years is a good replacement for the 26-year retiring manager. In fact, Moyes is the perfect replacement for the fiery Ferguson just in the same way Tim Cook is the perfect replacement for the charismatic Steve Jobs.
However, this is not to say that Manchester United will not experience some rough spots in the next season. For one, the coach will need to win the trust of the players who seem to believe in the infallibility of Ferguson’s decisions and he will probably need at least the first half of the next season to do that. The club will also need a season of adaptation for the management, coach and players to evolve into the dynamic team that they were under Ferguson.
A Foolish take
However, we should not lose sight of the fact that the success of both Apple Inc. (NASDAQ:AAPL) and Manchester United PLC (NYSE:MANU) lies more in the strength of their core business, competitive advantages, innovative products and market dominance among others and less on the person who is in charge of running the ship. For instance, the post-Steve Jobs era gave us the iBooks Textbooks for iOS and iBook Author for Mac OS X, the 3rd generation iPad with its Retina Display, iPad Mini, iPad 4 and of course the iPhone 5.