Why is the Pointsbet (ASX:PBH) share price on a losing streak today?

Two men in a bar looking uncertain as they hold a betting slip and watch TV.

Shares in gaming company specialist Pointsbet Holdings Ltd (ASX: PBH) continue an extended run into the red today.

The selling pressure marks another day of downturn for Pointsbet with the company’s share price plunging 40% last year after reaching highs of more than $17.

At the time of writing, the Pointsbet share price is $6.80, a 5.16% drop for the day, despite no price sensitive news from the company.

Why is the Pointsbet share price sliding again today?

There’s been nothing remarkable out of Pointsbet’s camp that may account for its losses this week. However, general trading is off to a choppy start in 2022, with only small pockets of green scattered throughout the market today.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is down less than 1% on the day whereas the high beta S&P/ASX All Technology Index (ASX: XTX) has tanked more than 2%.

For comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) is down only 0.26% this afternoon.

Both sectors are demonstrating weakness which appears to be spilling over to Pointsbet and fellow gaming company Tabcorp Holdings Ltd (ASX: TAH), down around 1% today.

Aside from the broad sector weakness, the company released a market document outlining the issuance of 509,128 new fully paid ordinary shares to one of the US’s largest gaming companies Penn Interactive Ventures, LLC.

Pointsbet notes that Penn Interactive is a subsidiary of Penn National Gaming, Inc. The shares were issued at a price of $6.884 per share. That’s 1.23% more than Pointsbet’s current share price.

Both Penn and Pointsbet have been in talks for some time now with Penn taking the opportunity to opt for additional equity rather than an additional cash consideration.

However, the company issued the shares without any disclosure to investors “under Part 6D.2 of the [Corporations Act 2001]”.

The company’s announcement notes that “as at the date of this notice, the company has complied with, the provisions of chapter 2M of the Act as they apply to the company; and section 674 of the Act; and as at the date of this notice, there is no information that is ‘excluded information’ (within the meaning of section 708A(7) and section 708A(8) of the Act) which is required to be disclosed by the company”.

The move follows Ohio governor Mike DeWine allowing sports betting under state law on 23 December 2021, paving the way for the establishment of more comprehensive gaming services in Ohio.

Pointsbet share price summary

The Pointsbet share price has slipped more than 40% into the red over the past 12 months and is already down more than 3% to start off 2022.

In the past month, it has slipped more than 4% and is down more than 5% for the week. Each of these returns has lagged all benchmarks and indices across respective time frames.

The post Why is the Pointsbet (ASX:PBH) share price on a losing streak today? appeared first on The Motley Fool Australia.

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The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FVj9fe

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