All rights reserved. Charles St, Baltimore, MD Investors clearly are bullish toward online gambling stocks, as they should be. To be sure, LCA stock has an interesting case. But if you look closer, the case looks concerning.Shark ion robot repair
Those competitors will be fighting hard for every dollar in every market. Importantly, they will have more resources, even after the merger, than Golden Nugget likely will.
The company does have solid name recognition in some markets. Not coincidentally, one of those markets is New Jersey. The Golden Nugget in Atlantic City opened in But those properties are hardly at the high end of their markets. The Las Vegas property, for instance, is not on the Strip, but Downtown. And as iGaming expands nationwide, Golden Nugget will be competing with brands that are, whether those brands are owned by national casino operators or leaders in daily fantasy sports.
Those nationwide brands also will be pouring tens of millions of dollars into every market they enter. There will be free bets at sign-ups, contests, promotions, and rewards programs. Much of the money coming from LCA shareholders actually is going to pay down debt. And that will matter. If rivals are spending more, they will have a key edge. The company will have some name recognition in Pennsylvania, which was a feeder market for Atlantic City before it legalized gambling in But in Michigan, the company likely starts from behind.
But online sports betting operators are moving into iGaming with some success in New Jersey. So, yes, Golden Nugget is the market share leader in New Jersey. But online gambling markets, in particular, are mostly self-contained. To be fair, even after the rally, LCA stock incorporates at least some of these concerns. It should continue to do so even with upfront losses in Pennsylvania and Michigan. Indeed, in Europe, which has a much more mature market, many smaller iGaming companies provided excellent returns for some time.
Most were then swallowed up at a premium in the consolidation seen over the past decade. Growth is what really matters. On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held either directly or indirectly any positions in the securities mentioned in the article.
Click here to see what Matt has up his sleeve now. Log in. Log out. About Us Our Analysts. Sponsored Headlines. More from InvestorPlace.All rights reserved.E3 code on electric heater
Charles St, Baltimore, MD That stock originally started out as a special purpose acquisition company SPAC. But once its reverse merger closed, the newly named stock essentially doubled from the period when it was announced. That is when the stock symbol changed to DKNG. That is also when a good number of investors may take a position in the merged company. Right now a date has not been set, but the merger is likely to occur sometime in September or October. Golden Nugget Online Gaming just revealed its second-quarter earnings on Aug.
This was done even though it is still a private company and has not yet merged with Landcadia Holdings. After all, its owners and managers will still be the dominant shareholders of the merged company, once it merges with LCA stock and effectively goes public.
Landcadia Holdings Stock Is a Golden Nugget of an Opportunity
GNOG launched in and became profitable in It has applied for online gaming approval in Pennsylvania and Michigan as well. Moreover, there will be more shares outstanding after the merger, so the pro forma market capitalization will be higher. This is based on 68 million shares outstanding after the merger, based on the investor slide presentation.
By contrast, DraftKings is much more expensive. Therefore, its EV-sales ratio is That makes the difference between On the date of publication, Mark R. Hake did not have either directly or indirectly any positions in any of the securities mentioned in this article.
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Finance Home. Landcadia Holdings II, Inc. Currency in USD. Add to watchlist.Bala pooja vidhanam
Summary Company Outlook. Top Reactions. I am starting to think that confidence is building that this will happen because of lca iii. Reply Replies 4. Reply Replies 3. Just a reminder!!! This price will not fall after the merger!! Have a good day. The purpose of a PIPE is for the issuer of the stock to raise capital for the public company. If the business is merged with another or sold soon, investors may be able to receive dividends or other payoffs.
Dividends are cash or stock payments from companies to their shareholders or investors. With a structured PIPE, preferred stock or debt securities convertible to common stock are sold. For this reason, a structured PIPE transaction may need prior stockholder approval. Large amounts of shares are typically sold to knowledgeable investors over the long term, ensuring the company secures the funding it needs. Because PIPE shares do not need to be registered in advance with the SEC or meet all the usual federal registration requirements for public stock offerings, transactions proceed more efficiently with fewer administrative requirements.
However, on the downside, investors may sell their stock in a short amount of time, driving down the market price. If the market price drops below a set threshold, the company may have to issue additional stock at a significantly reduced price.
Late october we lit? Don't be impressed by a So, while green is preferable to red, remember that we're in this for the merger, not the peanuts of a return to some semblance of value sanity. This stock should be well-ensconced in the 18s right now, and a multiple of that once the merger goes through.
Keep your expectations where they ought to be. Reply Replies 5. Ok I bought back all my short positions.All rights reserved. Charles St, Baltimore, MD At the time, the mania over special purpose acquisition companies, or SPACs, was in full swing. But should they buy it?
Faithful investors were rewarded, as Landcadia soon rose to its previous peak. Interestingly, the SEC filing announcing the merger reads like an advertisement. So far, Fertitta sounds like a hype man and a big talker.
Admittedly, Golden Nugget Online Gaming is a known entity among e-gambling fans. In other words, it appears that Golden Nugget Online Gaming is targeting a compelling opportunity in lucrative markets. Will the company compete successfully with DraftKings?
That remains to be seen, but risk-tolerant investors might be willing to gamble on it. What matters is whether the company can execute. If so, the owners of LCA stock should enjoy meaningful profits. On the date of publication, David Moadel did not have either directly or indirectly any positions in the securities mentioned in this article.
Log in. Log out. About Us Our Analysts. Sponsored Headlines. More from InvestorPlace. Stocks to Buy Trump vs. Subscriber Sign in Username. Sign in. Having trouble logging in?All rights reserved. Charles St, Baltimore, MD Some of these stocks have very serious upside potential.
As I previously pointed out, one reason for this is very simple. The general investing public tends to wait to buy these stocks until after the combination. In some cases, investors are not aware that you can buy the SPAC stock first. In other cases, they are not aware of the newly public company until it starts trading under its own new symbol.
Therefore, an investor can get in on the bottom floor, so to speak.
Landcadia Holdings II Has Star SPAC Potential
The potential for huge upside profits, once the combination goes into effect and the stock symbol changes, is very high. However, as the list I am presenting below shows, sometimes there are hiccups.
In one case there is a lot of drama and that is limiting the price from rising right now. But, as you will see, that in an of itself, presents a value buying opportunity. I suspect the same could happen with Golden Nugget Online Gaming. Its new symbol will be GNOG, once the deal closes sometime this quarter, although a date has yet been set.
One of the key differences is profitability. So GNOG is much more profitable. I suspect there will be more of these online casinos going public, as the Wall Street Journal recently wrote. This is especially since physical casinos are losing money head over heals. I believe, given its profitability, it will likely double or even more once the merger is approved and the new symbol starts trading.
But that deal was announced on Jan. A special meeting of shareholders is scheduled for Aug. Right now, the stock price implies that the deal will not pass. Most investors should probably just wait and see what happens with GB stock. Sometimes these deals are better when everyone is on the same side, not working against each other. That seems to be the case here.Golden Nugget Stock IPO Merger With Landcadia Holdings II (Ugly Truth About LCA Stock)
The company has to consummate its Initial Business Combination by Sept.Shares of Landcadia spiked after the announcement as investors cheered the opportunity to gain exposure to the fast-growing online gambling market. Instead, an already-public special-purpose acquisition company SPAC will be bringing it public through acquisition.
SPAC IPOs are not new, but they have risen in prominence in recent years as an attractive way for private companies to go public faster. The deal still needs to be approved by Landcadia's shareholders and by regulators before it can close; however, Landcadia is already a public company, which means investors can buy the stock in anticipation of the deal closing to gain exposure.
The deal is expected to close in the third calendar quarter ofand when it does, the trading symbol will change to "GNOG" from "LCA. Investors are excited over the Golden Nugget Online Gaming IPO because the company is a way to play the fast-growing online gambling industry.
There is a lot of hype around the potential size of the online gambling market in the U. Golden Nugget Online Gaming focuses on iGaming, or online casino gambling, which consists of online slot machines and online card games such as poker. Although not as many states have legalized online casino gambling, a few -- including New Jersey, Pennsylvania, and Michigan -- have.
It was the first online casino to set up shop in The company believes it can continue its rapid pace of growth in the coming years.Tempo horn sound
Despite the enticing growth story, there is a sticking point with the deal that investors should be aware of. In other words, Fertitta is on both sides of the transaction as a seller and a buyer, which technically makes the acquisition a related-party transaction.
Fertitta's involvement as both a buyer and a seller should be carefully scrutinized by investors as it constitutes a conflict of interest in some regards. Golden Nugget Casino is wholly owned by Landry's, a holding company owned by Fertitta; however, Fertitta doesn't own a majority of Landcadia shares.
Therefore, Fertitta is a net seller of the online casino and has some influence over the buyer. Golden Nugget Online Gaming is poised to be a strong growth stock in the coming years, and is worth paying attention to. If it can translate that lead to other states, the business will likely experience high growth and see its stock soar.
However, this level of operational execution is no sure bet, and investors should be mindful of the risk that the company could fall short. Investing Here's why. I can remember when hedge fund managers were buying them in to park their money during the correction. This year, as you're probably aware, they've taken off like weeds. People can't get enough of them. Sure, you're also making a play on online gaming, but as my InvestorPlace colleague Matt McCall recently argued, Landcadia is a bad bet in a winning sector.
It's about a billionaire looking to cash in on today's SPAC gold rush. To save his over-leveraged hospitality empire," McCall wrote on Sep. This player? Not so much. As I said, SPACs are an exciting vehicle because it allows the average investor to invest with some of the industry's biggest successes. He's used debt to build his restaurants, hotels, and sports teams he owns the Houston Rockets.
Fansided published an article in March that questioned the billionaire's financial wherewithal to buy the Houston Rockets in September Of all the horses to bet on, Fertitta might not be the one whose house is in the best shape. His debt situation alone suggests a lot has to go right for him not to lose some of his toys in the coming months. With the novel coronavirus sticking around intohis businesses are right in the crosshairs.
That's not a good place to be.
I believe they are the best-in-class, on-demand food ordering and delivery partner for customers and restaurants.
They are also positioned well to take advantage of the massive unpenetrated market for online delivery, particularly in secondary markets," Fertitta stated in the press release announcing the completion of the merger. Before you plunk down money on LCA stock, you might want to consider that Fertitta's track record isn't all that it's cracked up to be. Waitr's revenues have grown significantly in the past year compared to sales in ; it is still losing a lot of money. While it appears Waitr has turned a corner, its stock's recovery in seems to have come to an end as we approach the final quarter of the year.
Since the middle of August, it's lost one-third of its value. It's got a long way to go to get back to break-even. I don't see it doing so until it books a couple more quarters of profitable growth. Don't be the one to help him.
Landcadia Holdings Could Double After Its Golden Nugget Merger
On the date of publication, Will Ashworth did not have either directly or indirectly any positions in the securities mentioned in this article. Will Ashworth has written about investments full-time since He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. Yahoo Finance. Sign in. Sign in to view your mail. Finance Home.
Landcadia Holdings II, Inc. Currency in USD. Add to watchlist. Summary Company Outlook. Trade prices are not sourced from all markets.
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