|Kempton 15:35||The Butcher Said||14/1|
DraftKings Smashes It
DraftKings today reported fourth quarter and full-year 2020 financial results. For the three months ended December 31, 2020, DraftKings reported revenue of $322 million, an increase of 98% compared with $162 million during the same period in 2019 and more than one-third above the Wall Street consensus estimate for sales of $233.2 million. An Ebitda, loss of $87.9 million was also better than the adjusted Ebitda loss of $112.8 million forecast by analysts. DraftKings also raised its full-year 2021 outlook, forecasting revenue between $900 million and $1 billion. That is up from a prior range of between $750 million and $850 million and reflects strong performances in new online betting states such as Michigan.
Shares in DraftKings roared ahead on the back of the results - up 7% at the time of writing.
Flutter Steady Ahead of 2020 Preliminary Results
It has not gone unnoticed that against a backdrop of the Europe-wide Stoxx 600 losing 1.3 per cent in early trading, London’s FTSE 100 benchmark shedding 0.9 per cent and Germany’s Xetra Dax dropping 1.2 per cent shares in Flutter Entertainment have edged higher (Whilst shares in betting market rival Entain are 1.5% lower). Flutter is set to announce 2020 Preliminary Results on the 02 March 2021 whilst U.S. rival DraftKings has a Q4 2020 Earnings Call at 8:30 AM EST today - which will provide us all with a decent snapshot of developments in the nascent legal U.S. online betting market. Recent results out of Michigan have given rise to speculation that both companies may be about to announce an upgade to their U.S. betting market expectations.
Whilst Bank of America expects DraftKings to top revenue expectations due to better than expected state reported GGR contributing to an overall increase in market share, they anticipate that the company will be reporting a significant increase in marketing spend and they also point out the fact that there are 60M DraftKing shares due to come off their lock-up period which could contribute to short-term price pressure on the company's share price - regardless of how good its numbers are.
Excluding the five largest technology-driven stocks (Apple, Amazon, Microsoft, Google, and Facebook), which make up 22% of the S&P 500’s market capitalisation, the forward price-to-earnings (P/E) ratio has now dropped to 16.8 times, compared with a 10-year average P/E of 16.4x, suggesting that stocks are no longer significantly overvalued and that buyers may soon return to the market once the froth from the recent bond market blowout settles.
Can Under The Radar Webis Catch A Bid?
Webis Holdings, the little known online gambling company, with a small foothold in the U.S. online betting market has released Interim Report and Financial Statements for the period ended 30 November 2020. For the half year group amounts wagered were US$ 45.3 million, up 20% on ther prior year. Turnover reported was US$ 7.4 million (2019: US$ 8.1 million), and gross profit increased 49% to US$ 2.67 million (2018: US$ 1.79 million). Webis chided the stock market for overlooking its position and potential in the U.S. Betting Market space. The company pointed out that its principal subsidiary WatchandWager, remained well-positioned across many states, most particulalry California and it highlighted a key strategic aim as being the need to educate "the decision-makers and regulators to understand the fiscal benefits of including mobile wagering within retail operations." Noting that many major large multi-national gambling entities continued to search for merger or acquisition of key assets in the USA, Webis concluded that "Overall, we consider the company to be undervalued on key metrics and our potential for growth it is important that now we "fight above our weight' to make the industry aware of this. We will keep shareholders fully informed of developments in our exciting future strategies." The company did not disclose an intention to buy Bitcoin and nor did it reveal an intention to change its name to something more pertinent to the industry that it operates in - something that would normally form the first step of any basic repositioning strategy.
Webis shares ended the day up 40% or 0.8p at 2.8p. No longer under the radar. One for the crowd at wallstreetbets.
Please do your homework before investing. Shares go up and down.
U.S. Betting Market: In The Know
Required reading on the nascent legal U.S. online betting market.