MSG Stock Price Hits All Time High Despite Loss of Lin
Earlier this year, the New York Knicks made a controversial decision to let go of point guard Jeremy Lin. Right after the decision was made, the stock price of Madison Square Garden Company dropped 8.5 percent, with many concerned that letting Lin go would lead to tough times for the company financially. Clearly that is not the case, as MSG's stock closed today at an all time high price.
At the closing bell, MSG was at $39.39 per share, while it was worth less than $39 in early July before his departure became certain. This is another textbook case of people taking hype and using it to obscure facts and reality.
Jeremy Lin played very well in a small sample size for the New York Knicks. That led to national media attention, jersey sales, dollar bills, and the hype. All of that was great, but obscured the fact that one above average basketball player does not have the power to sink a multibillion dollar corporation.
This also destroys the argument that was made countless times that the Knicks should have brought Lin back for his marketability. MSG owns three professional sports teams and one of the premier entertainment venues in the world. They don't need Jeremy Lin's jersey dollars. What they need is a sustainable salary cap situation to build for their future. For once, the Knicks made a good decision, and MSG is proving it by thriving in the stock market.