Golden Nugget On-line Gaming (GNOG) shares started buying and selling on December 30, 2020, following the merger of Landcadia SPAC of Tilman Fertitta with a non-public on line casino firm working as Golden Nugget.
Golden Nugget is a web based gaming firm with two foremost segments: sports activities betting and a web based on line casino. It’s the first firm to have stay on-line sellers and a stay on line casino in the USA.
Not like different on-line playing video games, GNOG has primarily targeted on rising the iCasino enterprise fairly than sports activities betting. This has led to favorable buyer acquisition and cross-selling alternatives. ICasino clients are usually extra worthwhile than stand-alone sports activities betting clients. The principle driver of GNOG’s long-term success might be its means to accumulate on line casino clients differently than its opponents comparable to DraftKings (DKNG), FanDuel and Penn Nationwide (PENN) (which owns Barstool Sports activities).
Since on-line playing legal guidelines have been modified in 2018, 26 states have legalized sports activities betting and 16 have legalized on-line sports activities betting. GNOG has been working as an “iCasino” in New Jersey since 2013, the place it has an 8% share of essentially the most superior gaming market in the USA exterior of Las Vegas. The corporate additionally launched into Michigan, Pennsylvania and West Virginia and bought rights in Illinois, Louisiana, Nevada and Mississippi.
Thomas Winter, President of GNOG, stated, “We’re delighted to be stay in Michigan and optimistic in regards to the income alternative. We have now simply launched our advertising marketing campaign and already register virtually $ 2 million in day by day bets in casinos. Michigan is adopting on-line playing at a fast tempo, and we count on our Nice Lakes state enterprise to exceed our earlier expectations. “
On February 24, GNOG introduced an settlement with Tioga Downs, which can permit it to function betting at on-line casinos below the Tioga license in New York. Tioga is without doubt one of the seven industrial and tribal casinos in New York Metropolis. It’s believed that the New York on-line on line casino market will attain $ 2 billion.
On February 8, GNOG launched its preliminary monetary outcomes for the yr 2020. For the 12 months ended December 31, 2020, GNOG launched the next unaudited estimates:
- Whole income between $ 90.0 million and $ 91.0 million in comparison with $ 55.4 million in 2019, a rise of roughly 63%;
- Gross gaming income of between $ 101.0 million and $ 102.0 million, in comparison with $ 60.9 million throughout the identical interval in 2019, a rise of roughly 67%; and
- Working revenue between $ 23.0 million and $ 24.0 million (between $ 28.0 million and $ 29.0 million earlier than roughly $ 4.0 million to $ 5.0 million of prices associated to the enterprise mixture firms with Landcadia Holdings II, Inc.), up from $ 17.6 million in 2019, a rise of roughly 38% (or roughly 62% earlier than enterprise mixture prices).
The ultimate report for the fourth quarter of 2020 is anticipated to be launched shortly.
GNOG is 52% owned by Tilman Fertitta, the proprietor of eating places, inns, casinos and the Houston Rockets within the NBA. Fertitta’s belongings embody 5 land-based casinos in the USA below the Golden Nugget model. As well as, Fertitta has 600 Landry eating places. These firms present GNOG advertising entry to Golden Nugget’s 2.5 million on line casino loyalty members and Landry’s 3.5 million restaurant loyalty members. This drastically reduces buyer acquisition prices.
GNOG at present has the bottom valuation within the iGaming area in the USA. It’s buying and selling at round 6.4 instances estimated income in 2022, which compares very favorably to DraftKings, which is buying and selling close to 20x.
What makes GNOG significantly attention-grabbing proper now could be that it just lately referred to as up its warrants. House owners of warrants should train their warrants by Monday, March 8 at 5:00 p.m. ET, in any other case they are going to be liquidated. There are almost 5.9 million public warrants, that are referred to as, and a further 10.541 million non-public warrants, which aren’t referred to as.
When warrants are referred to as, this typically leads to extra promoting strain as those that maintain the warrants don’t need to add extra capital to their present place. Quite than including capital to their funding, they are going to be inclined to promote the surplus shares they at present maintain. That is properly deliberate and doubtless one of many causes GNOG has been below strain because the announcement of the decision for public warrants on February 4.
I’m in search of the overhang of the redemption of warrants to take the strain off and for the inventory to search out higher help. Along with relieving the promoting strain brought on by warrant buybacks, it’s possible that a part of the $ 1.9 trillion stimulus invoice will finally find yourself in on-line gaming and profit extra in inventory.
The chart beneath will not be interesting in the mean time, however there’s help close to round $ 13. The inventory wants to interrupt out of the downtrend line and minimize some overhead resistance to achieve momentum.
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