Is now a good time to invest in Golden Nugget gambling stocks? The firm’s share value shot up 50% after Draftkings takeover takes shape! (Photo by Matt Flores on Unsplash)
American daily fantasy sports contest and sports betting operator DraftKings have revealed that they have successfully negotiated a 100% ownership deal to secure GNOG from conglomerate and holding company, Fertitta Entertainment. The deal is said to be worth $1.56 billion, and will also see company founder, Tilman Fertitta, become a member of the board at DraftKings.
For every GNOG common share, DraftKings has agreed to pay 0.365 new shares.
Tilman Fertitta, who has been the largest shareholder, chief executive and chairman for Golden Nugget Online Gaming, and currently holds 46% of ownership, has accepted the condition to hold all DraftKings shares that he will obtain – worth in excess of $700m – for a minimum period of one year. As news broke of DraftKings purchase, Golden Nugget Online Gambling stock saw over an incredible 50% spike in price. The stock finished the day by almost reaching a 6 month high, with a price of $18.50. DraftKings on the other hand, saw a more moderate increase, as would be expected, of 1.49%, trading at $52.36. Subject to the appropriate regulatory approvals, DraftKings will finalise the takeover during 2022’s first quarter.
Last year, Golden Nugget Online Gaming span off from Golden Nugget, a land-based company, via a SPAC merger. The deal at that time put a value of approximately $745 million on Golden Nugget Online Gaming. Chairman of the board and CEO of DraftKings, Jason Robins, spoke about how GNOG will enhance DraftKings ability to reach a wider consumer base in an instant. He spoke highly of GNOG, saying that the brand was synonymous with entertainment and iGaming.
This is the second acquisition for DraftKings we have reported on this year as the firm took over a Tel-Aviv-based software company. DraftKings has also been regularly linked with bids for multiple brands and software providers within in iGaming and sports betting throughout the year as the company looks to continue to expand by snapping up competitors and smaller companies that match the brand’s growth strategy.
Jason Robins Optimistic & Enthusiastic
Robins continued by expressing his enthusiasm for Tilman Fertitta joining the board, as well as being one of the largest shareholders. This deal will create meaningful synergies, like increasing combined revenues which will be achieved by added cross-selling opportunities, product expansion driven by tech, loyalty integrations, more effective marking efficiencies, and technology optimisation, Robins believes. Tilman Feritta said that this deal will benefit his assets, using the land-based Golden Nugget’s player database as an example.
Feritta is of the opinion that the deal will also add great strength for shareholders, as 2 market leaders combine to become the leading player globally in entertainment, online gaming and digital sports. He believes that with the mammoth network that DraftKings has, merged with Fertitta Entertainment’s comprehensive customer database and extensive entertainment offerings, it could well make for a partnership considered unbeatable.
Golden Nugget Online Gambling has the opinion that DraftKings are a leading player in this particular flourishing space, and they are more than excited to be joining forces. Both companies will be agreeing to a powerful commercial agreement.
DraftKings Increased Earnings
DraftKings increased its earning guide last week, after it reported its financial results for the half-year, coming in with $609.8 million. The business was also under an SEC subpoena, as they revealed. It came after allegations in a Hinderberg Research report. The report made allegations that the SBTech, DraftKings’ business-to-business arm, was continuing to be active in certain black markets.
Golden Nugget Online Gaming reported revenue between the figures of $101 million and $102 million, in 2020, which represented a year-on-year increase of 65.8%. After analysing the new buyout, Regulus Partners believed that both parties have managed to get a value that is unusually good considering the current US market.
Regulus Partners noticed that fundamental profitability of the footprint in GNOG iGaming, will be a welcomed boost to DraftKings business model, pointing out the leading share they have in New Jersey.
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