Brera Holdings, an Irish-based company set up last year to hold an Italian amateur soccer club with a “mixed” competition performance, has seen its shares slump by 45 per cent in its first six days of trading on the Nasdaq in New York.
The company, registered in Ireland for tax purposes with an address on Burlington Road in Dublin 4, controls Milan’s Brera FC. It raised $7.5 million (€6.9m) in an initial public offering late last month, which was priced at $5 per share, the lower end of a $5-$6 range. It has since fallen to $2.75, giving it a market value of $31.6 million.
Brera FC, the so-called “third team of Milan” after Inter Milan and AC Milan, has been in existence since 2000. Brera Holdings was set up in Dublin in June last year to hold the “cult club” as it went about raising money in an IPO to expand by acquiring and developing a portfolio of football clubs in emerging markets including eastern Europe, Africa and South America.
Brera Holdings chief executive Sergio Scalpelli said last week that the company was “currently negotiating confidential deals for top division clubs in various European countries, starting from North Macedonia, while exploring opportunities primarily in Africa, but also in South America and other non-European countries”.
Brera Holdings made a net loss of €87,056 in 2021 on revenues of €420,167.
“We intend to be a leader in guiding the industry toward a more inclusive approach to professional football, through the use of unconventional routes and undiscovered markets with the aim to unleash their full potential,” the company said in its prospectus, which adds that it is targeting revenues in future from football competition prizes, sponsorship, the football transfers market, football school services and consulting.
The company is led by executive chairman Daniel Joseph McClory, a US corporate finance executive who is chairman and chief executive of Californian boutique investment firm Boustead & Company.
New York brokerage firm Revere Securities managed and underwrote the IPO, while Dublin-based law firm Philip Lee advised on Irish legal matters connected to the deal.
Brera was the first Irish-based company to IPO on Wall Street since fruit and vegetables group Dole, created out of a merger between Total Produce and Dole Foods, floated on the New York Stock Exchange in July 2021.
The IPO document concedes that Brera’s competitiveness is “mixed”.
“Due to repeated relegations from season losses we have gradually fallen from the Serie D, or highest amateur Italian football league level, to Seconda Categoria, the second-lowest level. We may, therefore, face substantial challenges in overcoming our history of competitive defeats in order to win crucial fan loyalty and related revenues, attract or retain talented players and coaching staff, convince sponsors to view our club association as an asset, or gain consulting work,” it said.