Stocks Tracker: Sustained sell-off sees sector’s shares slump

DraftKings 1 November closing: $49.01 30 November closing: $34.34 Peak November closing: $49.01  The word bubble has been used to describe the burgeoning US sports betting market since the repeal of PASPA in 2018. The astronomical growth has been subject to claims of unsustainability from deriders, but operators’ share prices have continued to fight against these claims. However, it seems November 2021 was the turning point and the moment the bubble must burst. DraftKings, the darling of the US sports betting investor community, has been left with a share price that pales in comparison to the heady heights of several months ago. The Boston-based heavyweight’s Q3 results released on Friday 5 November saw the market react with a sell-off as losses continued to mount against revenue increases. DraftKings posted net losses of $545m, worsening from the $395m reported during the same period in 2020 while costs relating to sales and marketing, product and technology, and general administrative costs amounted to $526m. Despite a revenue rise of 60% to $213m, investors were spooked by the operator’s growing mountain of costs, as the group’s share price dipped to $43.85 Thursday 4 November, closing price of $44.77. Elsewhere, CEO Jason Robins lifted the lid on DraftKings’ aborted takeover of Entain, claiming a leak forced the company to show its hand in the matter. Robins said: “As far as why we walked away, I think there are a variety of factors and certainly value is one of them. But there are a variety of factors that led us to feel like it just wasn’t the right thing for us to do at this time.” DraftKings’ share price continued to fall throughout November as the great sell-off continued, ending the month at $34.34, edging ever closer to its 52 week low of $30.52.

Evolution 1 November closing: SEK1,401 30 November closing: SEK950.80 Peak November closing: SEK1,482.80 Live casino giant Evolution had a November to forgot as a damning report filed to the New Jersey Division of Gaming Enforcement accused the supplier of offering its services in illegal markets. This saw its market value fall by $3bn in the immediate aftermath. The report from Ralph Marra of Calcagni & Kanefsky LLP on behalf of unnamed private investigators alleged Evolution content was available in Iran, Syria and Sudan, all three of which are subject to US sanctions. Evolution games were also accessible in illegal markets Hong Kong and Singapore, as well as via unlicensed third parties in Europe. As the news broke on Wednesday 17 November, Evolution’s share price slipped to SEK1,408.40 from Tuesday 16 November close of SEK1,482.80. A week later, on Wednesday 24 November, Evolution’s share price had plummeted to SEK1,220 as fears continued to mount over the allegations. On the same date, the company confirmed it had triggered an internal review into the matter and claimed VPNs was the reason its content was available in illegal markets. Efforts to quell the furore from CEO Martin Carlesund were not reflected in the market, as the original report counter-claimed Evolution’s VPN defence, arguing that the supplier can see all IP addresses, and most importantly, know when they are manipulated through VPNs. The Stockholm-listed firm’s stock continued to fall throughout the rest of the month, slumping to SEK950.80 by Tuesday 30 November. Genius Sports 1 November closing: $18.96 30 November closing: $9.51 Peak November closing: $19.09  Genius Sports became yet another victim of the mass sell-off of US gambling stocks in November despite posting a Q3 2021 revenue increase of 70%. The data reported a 70.5% year-on-year (YoY) rise in its group revenue during Q3 with revenue hitting $69.1m on Tuesday 23 November, but this was coupled with a negative EBITDA of $0.4m and a net loss of $70m. The group also adjusted its EBITDA forecast to be “broadly breakeven” from a previous higher estimate of between $10m-$20m. These blemishes against the improved revenue saw a mass sell-off from investors, with Genius Sports’ share price closing out at $10.19 from Monday 22 November close of $13.64. Stock continued to slip in the last week of the month, tailing out at $9.51. Beside concerns over EBITDA and losses, investors took a strong interest in the New York-listed firm’s partnership with the NFL. On an investor call, Oppenheimer analyst Jed Kelly asked: “Can you talk about the profitability of the NFL deal. That is what investors are most interested in.” The NFL exclusive data deal is only expected to become cash positive in 2022, and then profitable over a six-year span, although Genius Sports did not disclose exactly how much it would earn from the NFL partnership as the rights to that product as sold as packages with other data rights and services. The group’s share price had been steadily declining throughout November having opened the month at $18.96 and peaking a few days later at $19.09. 888 1 November closing: 381.40p 30 November closing: 310.20p Peak November closing: 381.40p  A disappointing month in the stock market for London-listed 888 saw the operator shed nearly 71p in value per share by the end of November. After opening at 381.40p on Monday 1 November, the group’s share price would steadily decline throughout the rest of November, with an ASA ruling on Wednesday 10 November kickstarting a significant downturn in stock market fortunes. 888 was made to remove advertorial marketing material over “misleading” claims made by the operator relating to its slots brand, 777.com. The advert was deemed to be misleading regarding the use of free spins and the ruling saw the group’s share price slip to 362p from Tuesday 9 November close of 373.60p. The second half of November continued in a similar fashion with incremental declines heading into the fourth week, which saw the group’s stock nosedive to 334.40p on Wednesday 24 November, before continuing to fall, to close out the month at a lowly 310.20p. Despite the downturns in share price, several analysts continue to back 888 as a buy stock, including Peel Hunt. The analyst has set a target price of 750p and noted a potential upside of 59.2%.