Entain manages to turn the tables and continue growth in US sports betting market after massive share price drop. US market, innovations and expansion are the main focus.
British sports betting and gambling company, Entain plc (formerly known as GVC Holdings), recently had a massive blow experiencing a dramatic 18% share price decrease.
The US giant MGM set up a full merger worth £8 billion which was turned down. MGM has since pulled out, deciding it will make no higher bids.
The original £8bn merger offer was rejected by the Ladbrokes and Coral owner, leaving many wondering if it was the right move. This is considering recent drops in share price and the takeover coming to a halt.
MGM wanted to take over Entain to capitalise on the opportunity its technology provides. While shares did plummet over a lowball offer leading to a pause on all merger talks, Entain is slowly but surely getting back on top.
Entain’s Future Focus
While many had their eyes focused on the stock market and current share prices, Entain was adamant on making the right decision for the journey ahead.
As the owner of industry leaders, Ladbrokes and Coral has not just proven itself but also claimed the right to attract and reject lowball offers.
MGM had its own reasons for putting the brakes on the merger, but today it’s clear that Entain was right in not accepting lower offers.
During the last quarter of 2020, online betting revenues were up by 41%. The boredom caused by the pandemic lockdown has driven many players to spend more time online. In that time, sports betting saw a massive 59% increase.
Entain and MGM have a joint sports betting venture in the US. This operation is partly the reason why many believe MGM should’ve taken the plunge and bid more.
Sports betting is only now catching on in the US with legalisation being put in place. Thus, making the growth potential phenomenal.
Many true investors have revealed a higher bid from MGM would’ve been preferred. As Entain’s shares are currently still traded at a big discount to that of Flutter, its biggest rival.
Revenue Spikes Already Reported
While the drop definitely did damage, the potential and growth of the newly established US sports betting market could be a game-changer.
Only a few days after the report of the share price drop, Entain reported a surge in revenue.
Flutter continues to lead the market, while Entain and MGM go neck to neck. Both the latter offering the most in opportunity with an eagerness to expand and grow.
New Innovation and Virtual Sports
Entain is focused on industry growth and expansion. Merely a few days ago it was announced the company will be launching Inspired’s virtual sports content.
The virtual sports content will be available across all online and land-based brands including Ladbrokes, Coral, BetMGM, bwin, PartyPoker, and Eurobet.
The deal comes merely a week after the appointment of Jette Nygaard-Andersen as the new chief executive.
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