The PointsBet Holdings Ltd (ASX: PBH) share price doubled in a single day after the announcement of its FY20 results and game-changing media partnership with NBCUniversal. But as the sports betting scene in the US continues to develop, why has the PointsBet share price gone nowhere since August?
Time needed to digest run up?
Without further news, a company’s share price likely needs to take a breather after such a significant move up.
Zip Co Ltd (ASX: Z1P), for example, ran more than 60% in August after the announcement of its partnership with eBay and FY20 results. However, as the company emptied the clip of good news, its share price ran out of momentum to give up most of its August gains in the following months.
In the case of the PointsBet share price, not only did it jump 100% in a single day but it also announced a $353 million capital raising at an offer price of $6.50 per share a few days later. The significant move up combined with the share price dilution from the capital raising may have capped its ability to push higher.
The recent rotation from tech and growth to value and cyclical sectors is possibly another force acting as a drag on the PointsBet share price. Leading S&P/ASX 200 Index (ASX: XJO) tech shares across the board including Afterpay Ltd (ASX: APT) have struggled to outperform the broader market in November.
PointsBet timeline already announced
PointsBet’s plans in the US have already been announced in its previous FY20 results. This includes its plans to launch in Colorado in November 2020 and Michigan in the third quarter of FY21. And also the launch of its iGaming product in Michigan in Q3 FY21 and New Jersey in the second half of FY21.
The company announced its Colorado launch on 17 November. This represents its fifth online sportsbook operation in the US. The Colorado market represents an estimated revenue opportunity of $296 million by FY23. This compares to the FY23 revenue opportunity of $784 million in Illinois, $555 million in New Jersey, $317 million in Indiana and $159 million in Iowa. Pointsbet currently maintains a market share of 6.5% in New Jersey and 3.2% in Indiana as of the first quarter of FY21.
This Tiny ASX Stock Could Be the Next Afterpay
One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting…
Because ‘Doc’ Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget ‘buy now pay later’, this stock could be the next hot stock on the ASX.
Doc and his team have published a detailed report on this tiny ASX stock. Find out how you can access what could be the NEXT Afterpay today!
See how you can find out the name of this stock
Returns as of 6th October 2020
More reading
- The 13 ASX shares that could have doubled your money in 2020
- Why Afterpay, Goodman, MedAdvisor, & PointsBet shares are dropping lower
- PointsBet (ASX:PBH) share price on watch after US update
- Why Laybuy, Oil Search, PointsBet, & Webjet shares are racing higher
Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why has the PointsBet (ASX:PBH) share price gone nowhere since August? appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3mozG1L
Leave a Reply