(Bloomberg) -- The departure of a star basketball player has investors grappling with what this means for the New York Knicks after its owner reported better-than-expected second quarter earnings.
Shares of Madison Square Garden Co. fluctuated between gains and losses after the company reported quarterly sales of $632.2 million on Friday, beating the highest analyst estimate. This came after ESPN's Adrian Wojnarowski reported Thursday that Kristaps Porzingis, dubbed as the ‘unicorn' among local basketball fans, will join the Dallas Mavericks. After falling as much as 4.1 percent today, MSG shares rose 0.7 percent as of 3:32 p.m. in New York.
“While many have been quick to criticize Knicks management for trading a player often referred to as a ‘unicorn', the trade effectively gives the team a chance to start fresh with multiple future first round draft picks and virtually unlimited ‘cap room' to sign free agents in the upcoming offseason,” Evercore ISI analyst David Joyce said in a report dated Feb. 1.
James Dolan, the New York-based company's billionaire chief executive officer, has been adamant about intentions to diversify the business and pursue entertainment endeavors.
Evercore's Joyce believes it's “too early to pass judgement on the trade," since the Knicks franchise valuation is more aligned with broader themes like growing global reach and the New York City market rather than personnel transactions.
To contact the reporter on this story: Kamaron Leach in New York at kleach6@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Divya Balji
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