Everton’s ownership group, The Friedkin Group (TFG), is currently grappling with a significant PR issue following a troubling share price dilemma that has emerged since their takeover of the club.
Sources close to the situation have highlighted concerns over the devaluation of shares, which have now dropped to an estimated value of less than £175 each. This marks a stark contrast to the £3,400 per share they were being traded for just months earlier in November, leaving many fans feeling disillusioned. The controversial move is particularly significant as it follows TFG’s buyout of the club in December, which saw the total number of shares in circulation increase drastically from 135,000 to over 1.6 million, further diluting individual fan stakes.
The issue has prompted frustration among the small group of Everton supporters who had previously purchased shares through a private trading facility. According to reports, approximately 1,500 supporters had acquired around 8,000 shares, believing they were securing a valuable piece of the club’s future. However, with the substantial increase in share volume and the overwhelming debt facing the club, these shares have now lost nearly all of their financial value. This has raised questions about the transparency of the club’s management under the new owners and how the fans’ investments have been handled.
Despite the backlash, experts suggest that fans purchasing shares in this manner should have been aware of the risks involved. The suggestion is that only a small number of people, perhaps fewer than ten, bought into the club’s shares at the high price of £3,400 each.
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From a financial perspective, these investments were problematic given the club’s enormous debt load, which rendered the equity almost worthless. While the emotional attachment to owning a part of the club is understandable, it seems clear that these investors were taking a significant risk without fully assessing the financial implications of their decisions.
The situation is also complicated by the fact that TFG acquired a large portion of these shares for a significantly lower price, at about £175 each. This drastic difference in valuation has sparked further discontent among the fanbase, as many feel they were misled about the true value of their stakes. The Friedkin Group now faces the challenge of rebuilding trust and addressing the public relations fallout from the situation, as it risks being seen as out of touch with the fans who have long supported the club.
Fans Disappointed
While some fans may be disappointed with their financial losses, it’s essential to recognize that, in the absence of any fraudulent activity, the principle of “buyer beware” applies to stock purchases in this context.
Those who invested in Everton’s shares did so at their own risk, and unfortunately, this has not paid off as they had hoped. The significant debt carried by the club overshadowed any potential equity growth, leaving many feeling disillusioned with the outcome.
Despite the frustrations surrounding the share issue, it’s important to note that the situation has not been one of deliberate wrongdoing. The Friedkin Group’s approach may have been heavily focused on restructuring the club’s finances, which has led to the decision to significantly reduce the value of the equity.
However, the optics of the situation, particularly in relation to the club’s relationship with its fans, present a significant PR challenge. The Friedkin Group will need to carefully manage the fallout in order to move forward and restore both financial stability and fan confidence at Everton.
