Earnings+More - DraftKings catches hack flak
DraftKings catches hack flakDraftKings hack issues, Morgan Stanley sector reboot, Bally’s Chicago deal +MoreGood morning. On today’s agenda:
DraftKings hack attackShares recover some ground after reports suggested DraftKings customers were seeing money being withdrawn from their accounts without their knowledge. Hack me or sack me: DraftKings shares recovered to end the day 5% down yesterday after the Action Network broke the news that customer account details had been compromised by hacks on third-party sites leading to unauthorized withdrawals.
😱DraftKings shares recover ground after hack news Not ideal: Analysts pointed out that the news of the breach came at a “crucial time” for DraftKings ahead of the soft launch in Maryland, which will launch fully on Wednesday, while the World Cup also started over the weekend with the USA playing yesterday (a 1-1 draw with Gareth Bale).
**Sponsor’s message** Venture capital firm Yolo Investments manages €550m in capital across 80 of the most exciting companies in fintech, gaming & blockchain. The Gaming Fund, regulated by the Guernsey Financial Services Commission, a dedicated 29-company, €183m AUM portfolio has invested in fast-growth assets including Dabble, Kalamba, SimWin & ThriveFantasy. Yolo Investments has just opened its fund to new investors as it looks to scale new cutting-edge concepts, including its exclusive high-roller land and live casino brand, Bombay Club, global banking network & OTC desk Aims Group. Analyst rebootMorgan Stanley has issued a sector note suggesting online sports betting and iGaming is the best growth story in consumer stocks. Here, there and everywhere: In an initiation note heralding the arrival of ex-Goldman Sachs analyst Stephen Grambling, the team at Morgan Stanley put DraftKings up as their top pick, suggesting the profit inflection point is “here”. The team point to Pennsylvania, where they say promotional spend has “declined precipitously” since the state went live in 2019.
Other highlights: MS cautioned, though, on whether or not iGaming is accretive for the gaming sector, saying that, similarly to ecommerce, it has the potential to both drive incremental revenue and cannibalize incumbents.
Bally’s Chicago backingBally’s announced it has secured $500m of backing from an unnamed real estate private equity firm to build its Chicago casino. Brass construction: The deal will see the unnamed investor stump up $200m in order to buy a 30-acre parcel of land on which Bally’s Chicago will be built, plus an additional $300m of development funding with leaseback arrangement for the land. The initial rental cap rate is 8.5% annually, moving to 7% after certain construction milestones.
Stock watch🚀Bet-at-home soars over 26% yesterday Analyst takesAGS: After a virtual meeting with management, Truist suggested the departure of Apollo as a shareholder and the rejection of the $370m Inspired bid were not linked and that it was the board’s decision to repulse the takeover bid on the basis of undervaluation.
NewslinesNo booster shot: Morgan Stanley suggested the resumption of eVisa travel, which restarted on November 1, had failed to result in increased visitor numbers. Entain has been awarded licenses by the State Administrative Office of Saxony-Anhalt for the operation of its gaming and poker services throughout Germany. Better Collective has initiated a share buyback program for up to €5m to cover future payments relating to acquisitions and LTI programs. Inside The Pocket, the F2P provider, has announced a deal with Brazilian operator PixBet for the 2022 World Cup in Qatar. King of Queens: The New York Post has reported that Steve Cohen, the NY Mets owner, is planning to build a soccer stadium in New York as part of his casino bid. Cohen is reported to be in talks with Hard Rock over the deal. Asking price: iGB is reporting that Catena Media has received “numerous” offers for its AskGamblers unit but that the sale price will be below what it bought it for. What we’re readingCrypto is the ‘commoditization of populist anger, gambling and crime’: Stephen Diehl interviewed in the FT. On socialGutsy… ⚡️ BREAKING: #Iran football team captain defies regime, backs protests: “We have to accept that conditions in our country are not right & our people are not happy. They should know that we are with them. And we support them. And we sympathize with them regarding the conditions.” CalendarDec 6: The Startup Month #5 Dec 13: Deal Talk #5 Dec 20: Due Diligence #2 Contact
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