OHIO ADVISERS BALK AT INDIANS IPO: A HIT FOR KIDS, BUT DON’T EXPECT A PENNANT VICTORY

Clevelanders may be rabid about their Indians, but root, root, rooting for the home team has its limits.

Whereas fans are willing to shell out all kinds of cash for seats along the first base line, jackets, caps, jerseys, etc., buying a piece of the team is another matter. Skepticism seemed the order of the day with the baseball team’s initial public offering last week.

Advisers in northeast Ohio said very few, if any, of their clients were buying in — at least initially.

“Our clients have expressed no interest in it,” says Geofrey Greenleaf, whose firm, Greenleaf Capital Management, runs $400 million.

Here’s his cold-blooded assessment: “We really have trouble seeing appreciation. The ball park won’t be new forever, and it’s costing more to pay these boys.”

“Nobody’s interested in a $1,500 souvenir, at least at this point,” says Cleveland planner Kevin Myeroff, referring to underwriter McDonald & Co. Securities Inc.’s requirement that investors step up to the plate for no fewer than 100 shares in the IPO, at $15 a share.

The comments of Mr. Myeroff, whose NCA Financial Planners supervises about $100 million, were typical. But if none of his clients was interested, someone clearly was, as the team succeeded in selling 4 million shares to the public. Unlike most IPOs, which are gobbled by the pros (of investing, that is), more than three-quarters of the Indians shares went to retail investors, a McDonald broker said.

When Nasdaq trading opened on Thursday, 1.5 million shares changed hands, and the stock closed the day off 25 cents, to $14.75.

For team owner Richard E. Jacobs, the beneficiary of the $53.8 million IPO bonanza, now was clearly the time to sell. After more than 40 years of futility and ineptitude, a stretch rivaled only by the hapless Chicago Cubs, the Indians have enjoyed a resurgence in recent years spurred by a perennially contending club — two World Series appearances in the past three years — and a sparkling new stadium, Jacobs Field.

As a result, the Indians are in the enviable position of routinely selling out Jacobs Field, something few major league baseball teams can boast.

But the team’s popularity isn’t enough to get clients of Cleveland-based Spero-Smith Investment Advisers Inc. interested in the stock.

“As a souvenir, it would probably be a good one,” says Jason Weybrecht, a portfolio manager with the firm, which manages $215 million. “As an investment, it’s not one of the best in the whole world.”

And he knows first-hand. He owns shares in the Boston Celtics, one of two other big-time franchises whose stock is publicly traded (the Florida Panthers National Hockey League team is the other).

He bought those shares at $35, when Larry Bird was shooting the lights out at the old Boston Garden and the Celtics routinely were championship contenders. Now, as the Celtics hit the golf course while others go to the playoffs, those shares are worth $20 and change.

wait and watch

“It doesn’t matter. I’ll never sell it,” he says of his Celtics stock.

Still, even the souvenir appeal of the offering isn’t enough to prompt investors to pull out their wallets. First, there’s the $1,500, a not insignificant sum. Then, if someone wants extra stock certificates for his grandchildren, they’ll cost him another $15 apiece.

“It starts getting away from souvenir (prices), and they start thinking, ‘Maybe I should buy a jersey or something,’ ” Mr. Weybrecht says.

Of course, there is the secondary market. Advisers suspect some cagey investors are waiting to buy smaller numbers of shares online at cut-rate transaction fees.

“Two or three or four weeks from now, they’ll have a better opportunity at a lower price,” Mr. Myeroff says. “This stock is so specific to Cleveland, Ohio, that I’m not sure there are enough people to generate a huge leap like some other IPOs.”

That’s the thinking of one of Mr. Myeroff’s clients, who promised each of his five grandchildren they would get a share, but decided to bide his time. With countless other grandparents around northeast Ohio undoubtedly planning the same thing, Mr. Myeroff foresees an administrative nightmare for the Indians.

“The company has to send each of those kids 10-Ks and annual reports. That’ll cost them a fortune.”