Madison Square Garden (MSG) Jumps On Speculation LeBron Will Be a Knick

July 7, 2010 4:19 PM EDT
If you believe the stock speculators, then LeBron James is about to become a New York Knick.

Shares of Madison Square Garden Inc. (NYSE: MSG) rose 6.5 percent today as speculators placed their bets that King James will be coming to New York. Volume in the stock was nearly 1.7 million shares today, or 5x normal. The options saw similar action with traders making bets on upside calls.

Madison Square Garden Inc. owns the New York Knicks franchise, among other sports franchises including the New York Rangers. They also owns the venue where homes games are played - Madison Square Garden.

LeBron will announce which team he will join tomorrow in an hour-long special on ESPN at 9 p.m. Many expect LeBron to re-sign with the Cleveland Cavaliers, or go to the Miami Heat. Other possible teams include the New Jersey Nets, Los Angeles Clippers, Chicago Bulls and of course the Knicks.

With millions of dollar flowing into Madison Square stock today, does someone know something?

If LeBron does go to the Kninks there will be some questions asked. Meanwhile, investors in Madison Square stock maybe facing a lose/lose situation. Shares may see a "sell on the news" reaction if he does sign with the Knicks and a "sell, sell, sell" reaction if he doesn't.

Trading in Madison Square Garden could again be interesting tomorrow as speculators take their positions ahead of the announcement.

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