Stocks Tracker: Fly me to the June

DraftKings

1 June closing: $49.57

30 June closing: $52.17

Peak June closing: $55.30

After a May to forget, DraftKings might have thought things could only get better in June. Instead, the Boston-based giant was blind-sided by a damning report which suggested investors should offload DraftKings stock due to the alleged black-market activity of in-house sports betting supplier SBTech.

DraftKings acquired SBTech in 2020 as part of a reverse merger with a SPAC which took the company public in April last year, with the operator set to transition to SBTech’s proprietary tech stack later this year, bringing an end to its relationship with Kambi.

However, the report, compiled by New York-based analysis firm Hindenburg Research, alleged that 50% of SBTech revenue was derived from markets where gambling is illegal. These markets include China, Thailand, Vietnam and Iran.

The report was released before trading commenced on Tuesday 15 June, with DraftKings’ share price slipping from a Monday closing price of $50.62 to under $45 as the market opened on Tuesday, before recovering to close out at $48.51.

The drop-off continued, with the group’s share price hitting a monthly closing low of $48.06 on Friday 18 June as the mid-month slump spell continues to affect the operator.

There were however shoots of recovery from Monday 21 June, with the group’s share price rising incrementally through to Wednesday 30 June, despite five US law firms inviting investors to seek damages in the aftermath of the Hindenburg report.

Scientific Games

1 June closing: $74.53

30 June closing: $77.44

Peak June closing: $78.14

A quiet month on the news front for the Las Vegas-based supplier ended abruptly on Tuesday 29 June after Scientific Games announced it would divest its lottery and sports betting businesses.

The decision saw the group’s share price rise from $75.96 on Monday 28 June to $77.68 by close of play on 29 June as the firm said it plans to become a content-led business with a sole focus on gaming.

The positive market response to the strategy gave Scientific Games a welcome boost, with its share price having suffered two major dips throughout June, bottoming out at $72.34 on Friday 18 June after recovering from a downturn to $72.54 on Thursday 10 June.

Scientific Games is planning to facilitate the sales of each business via various means and is exploring an initial public offering (IPO), a reverse merger via a SPAC, or through a straight sale of the divisions.

Scientific Games CEO Barry Cottle said: “These steps will accelerate our path to become a content-led growth company focused on leading in both land-based and digital markets.

“We believe these steps will enable us to capitalise on the high growth potential of each of our businesses, including their expanding digital content offerings and platforms, unlocking value for shareholders, customers and employees,” he added.

888

1 June closing: 402.60p

30 June closing: 383.80p

Peak June closing: 405.20p

A mixed month for London-listed operator 888 saw its new partnership with Sports Illustrated fail to generate a continued upturn in its share price following a sharp downturn in the middle of June.

The partnership with Sports Illustrated was first reported by EGR in April, and will see 888 afforded the exclusive licence to use the Sports Illustrated brand and trademarks for online sports betting and igaming purposes in the US and Canada.

Confirmation of the deal saw 888’s stock rise to 398.60p on Thursday 24 June, up from its 394.20p close on Wednesday 23 June. However, the buoyancy failed to materialise into meaningful gains, with 888’s share price proceeding to drop for the remainder of the month, culminating in a 383p slump on Tuesday 29 June.

888 confirmed it would look to expand the new partnership into Canada after single-event sports betting legislation was approved in the country, with the brand set for an initial launch in four US states: Colorado, New Jersey, Indiana and Iowa.

The end of June boon, although small, will have partly made up for a significant drop on Tuesday 15 June to 370.40p from Monday 14 June’s 383.20p.

Kindred Group

1 June closing: SEK146.75

30 June closing: SEK134.15

Peak June closing: SEK147

Kindred Group was just one Swedish operator to curse its luck in June due to events 1,600 miles away from Stockholm as Malta’s misfortune had a significant impact on the group’s share price.

The igaming hub was greylisted by the Financial Action Task Force due to concerns over anti-money laundering practices on the island, causing a knock-on effect for several Swedish firms with headquarters in the country.

As the news broke, Kindred’s share price plummeted from SEK143.70 on Thursday 24 June to SEK133.40 on Monday 28 June, before threatening to recover the following day, reaching SEK137 before eventually closing the month at SEK134.15.

Kindred’s share price on Tuesday 15 June had dropped significantly to SEK139.75 from its previous close of SEK144.60, but received a major boost on 2 July following the acquisition of B2B supplier Relax Gaming, but more on that next month.

Betsson AB

1 June closing: SEK75.50

30 June closing: SEK69.80

Peak June closing: SEK75.50

On the other hand, fellow Swedish operator Betsson managed to stave off the knock-on effects of Maltese malaise.

Betsson’s share price from Thursday 24 June (SEK70.40) only fell to SEK68.80 on Monday 28 June before recovering to end the month on SEK69.80.

Despite navigating the end-of-month downturn well, Betsson still suffered from a major share price dip on Tuesday 15 June to SEK71.90, having closed on Monday 14 June at SEK74.90.

Coincidently, Tuesday 15 June was the same date the Stockholm-listed firm won its appeal against a SEK20m penalty from the SGA over bonus violations.

Elsewhere, the operator revealed a strategy shift for its technology department following the departure of joint chief product officer (CPO) and chief technology officer (CTO) Peter Frey.

EGR understands Frey’s dual role will be split into two separate positions, with current director of platform and infrastructure Fredrik Ögren promoted to replace Frey as CTO.

Betsson is currently on the hunt for a new CPO, with Ögren serving as CPO in the interim.

The news did coincide with a slight upturn in Betsson stock, rising to SEK70.60 on Tuesday 29 June at close.