Stocks Tracker: M&A misfortune and expected Q4s dominate markets

Playtech 

1 January closing: 731.50p

31 January closing: 584p

Peak January closing: 731.50p

 The long-protracted takeover battle for Playtech eventually saw Aristocrat’s £2.7bn offer rejected by Playtech shareholders on 2 February, with the twists and turns in January toying with the supplier’s share price.

On 5 January, the Eddie Jordan-backed JKO Play was handed an extension to formalise a bid for Playtech which did little to impact share price with the group consequently finding financial backing from gaming tycoon Vikrant Bhargava on 10 January.

However, it was JKO’s decision to pull out of the bidding on 21 January that sent Playtech shares into a downward spiral, falling to 579.50p from a previous close of 730.50p.

Playtech’s share price began to recover following JKO’s decision to step away but reports that Asia-based shareholders were mulling over blocking Aristocrat’s takeover put another speed bump in the road.

On 26 January, reports emerged that shareholders were discontented with the Aristocrat offer, dropping the share price to 597.50p from 25 January’s close of 641.50p.

Aristocrat’s bid was rejected on 2 February, eventually seeing’s Playtech’s share price rise after a difficult end to January.

Entain 

1 January closing: 1,687p

31 January closing: 1,591p

Peak January closing: 1,728p 

Everyone expected it to come but when it happened the market still treated Entain with disdain. The operator’s remarkable 23 consecutive quarters of double-digit online growth, as full expected, came to an end for Q4 2021 due to regulatory issues in Germany and the Netherlands.

The London-listed operator is anticipating to post a 7% increase in net gaming revenue for the quarter but crucially recorded a 9% downturn in online net gaming revenue.

CFO Rob Wood said that a Q4 comparative was tough “because of various Coivd-19-related restrictions” during the same period in 2020.

CEO Jette Nygaard-Andersen commented: “2021 has been another successful and eventful period for Entain and our market-leading platform has driven another year of strong, sustainable and diversified growth. All our major markets have performed well.

“We continue to see significant growth opportunities ahead of us, with a total addressable market of around $160bn across our new and existing markets, as well as in emerging areas of interactive entertainment.”

Entain’s share price experienced a slight uptick on Thursday 21 January following the announcement to 1,724p but by Friday the market had reacted in a volatile manner, bringing the group’s share price down to 1,635p.

The firm began to show signs of recovery by 25 January and news of its £40m London tech hub opening in Farringdon to focus on NFTs and the metaverse saw its share price jump from 1,572p to 1,591p.

DraftKings 

1 January closing: $26.27

31 January closing: $21.99

Peak January closing: $27.49

 DraftKings suffered one of the worst months on the market since going public in April 2020 following its three-way merger with a SPAC and supplier SBTech as its share price bottomed out at $17.55 on 24 January.

This meant the group’s share price was below the $19.35 close on its first day of trading on the Nasdaq, representing a monumental fall from seeming stock market dominance last year.

Having been touted as a potential $100bn company by CEO Jason Robins to EGR 15 months ago, the Boston-based giant has seen its share price drop 73% since hitting an all-time high of $72 in March 2020.

The disaster on 24 January did offer some respite as the market closed at $19.37 but the following day on 25 January was another difficult moment as DraftKings closed at $19.16.

There was a small essence of recovery by the end of the month as the Boston-based operator’s stock closed at $21.99 on 31 January but it is a far cry from its previous heady heights on the Nasdaq.

The group posted more than $1bn in losses for the first nine months of 2021 and has lost two-thirds of its value since its failed attempt to acquire rival operator Entain with a $22.4bn offer in September 2021.

Genius Sports

1 January closing: $7.87

31 January closing: $6.48

Peak January closing: $7.87

A steady month for the data giant on the stock market was spiked by a virtual investor day towards the end of the month which saw the company outline its full-year 2021 expectations and hopes for 2022 and 2023.

The event, held on 28 January, saw Genius Sports reveal it predicts a full-year 2021 revenue of $262m with a corresponding EBITDA of $15m.

An initial 6.8% drop in share price recovered over the weekend to see Genius Sports’ share price rise to $6.48 from the 28 January close of $5.88.

Genius Sports, having penned an exclusive data rights deal with the NFL in April 2021, delved into how it expects the relationship to continue to develop and the impact it will have on revenue moving forwards.

The New York-listed supplier said 2023 revenue should hit $430m and an EBITDA rise of $50m within the next two years.

Genius Sports also anticipates an increase in in-play derived revenue – rising from 13% of gross gaming revenue in 2021 to reach 15% in 2023.