Now that LeBron James has decided to play basketball for the Miami Heat, stock prices of Madison Square Garden, Inc., owner of the New York Knicks, have dropped.
Madison Square Garden shares had risen as much as 11 percent this month as a nationwide fervor mounted over what team the NBA’s most prized free agent would pick.
On Thursday during an hour-long ESPN special, James announced he would be signing with the Heat instead of New York, Chicago or Cleveland.
On Friday, shares of MSG dropped 94 cents, or 4.6 percent, to close at $19.44.
That price per share was the lowest since two trading days before the start of the NBA free agency period began on July 1. The shares had hit a two-week high on July 7 of $21.91.
But all hope is not lost for the Knicks or its owner, says Gabelli & Co. analyst Christopher Marangi.
Right after James’ announcement, the Knicks made a trade that could still improve the team and MSG’s financial prospects, he said.
The Knicks traded David Lee to the Golden State Warriors for forwards Anthony Randolph, Kelenna Azubuike and Ronny Turiaf.
In trading Lee, the Knicks divested themselves of a big salary, giving them more than enough salary cap room to make additional trades.
New York announced they had signed free agent forward Amare Stoudemire to a five-year, $100 million deal on Thursday, giving the Knicks roughly $17 million under the NBA salary cap to sign additional players.
