Sports Betting, Advertising Spinoffs Pitched at Traders' Huddle
(Bloomberg) -- A spinoff of Europe’s largest pure online classifieds firm could have 100 percent upside after its separation from Nordic media conglomerate Schibsted ASA next year, a fund manager argued Wednesday at a conference in New York. The same manager also voiced bullish sentiment for Kambi Group PLC, a Stockholm, Sweden-listed sports betting service based in Malta.
Schibsted was the subject of one of several presentations at a spinoff and activist investor conference hosted by The Edge Consulting Group, which benefits The Alzheimers Association. Other calls by analysts and traders included Kambi, given the rising prospects for legal U.S. sports betting, and bearish signals from insiders at Wyndham Hotels & Resorts Inc. and Veoneer Inc.
The online classifieds spinco has significant potential to increase monetization and its operational leverage, Bodenholm Capital founder Per Johansson said in a presentation. With the top position in a winner-take-all market, the company has a mandate to consolidate and drive M&A, he added.
Trading spinoffs has become tricky during the recent market rout. After outperforming for much of 2018, spinoffs have now fallen behind the broader market. The Bloomberg U.S. Spin-Off Index has fallen 19 percent since Sept. 20, more than doubling the pace of the S&P 500’s retreat.
Here are some other calls presented at Wednesday’s conference:
- Kambi is poised to benefit from from the rise of legal sports betting across the U.S., Johansson said. The recent spinoff could see its U.S. market share skyrocket thanks to a hot start in New Jersey, where its customers, including DraftKings, enjoy a 65 percent share.
- Wyndham Hotels and Veoneer may continue to fall because insiders who bought earlier this year have not averaged-down those positions with additional buys at lower prices, said insider trading analyst George Muzea of Muzea Advisors.
- Ashland Global Holdings Inc. has identified close to $300 million of unallocated costs that Cruiser Capital Advisors believes could be eliminated to increase valuation before a sale, said founder Keith Rosenbloom. Cruiser, the firm’s 11th-largest holder according to Bloomberg data, has proposed some nominees to Ashland’s board. Rosenbloom’s idea was detailed in a letter to the company that Bloomberg reviewed last week.
©2018 Bloomberg L.P.