Canadian Betting Firm Prepares U.S. Listing After 230% Surge
(Bloomberg) -- Score Media and Gaming Inc. won shareholder approval for a stock consolidation Wednesday, putting the company in a better position to list south of the border.
The sports media and online betting company had sought approval to consolidate shares in preparation for a U.S. stock listing, as it seeks exposure to a broader investor base and deeper capital markets. Some exchanges require a minimum per-share price for listings.
Toronto-based Score Media fell 3.7% Wednesday to C$4.98 as of 3:44 p.m. after six straight daily gains. It’s up about 230% this year, making it the top performer in the Roundhill Sports Betting & iGaming ETF (BETZ) and bringing the company’s market capitalization to about C$2.2 billion ($1.7 billion).
Domestic prospects for sports betting legalization have been a key driver for Score Media’s shares, but its U.S. betting app, theScore, has also beaten some analysts’ expectations. Its sportsbook -- theScore Bet -- “demolished” Canaccord Genuity’s expectations in the fiscal first quarter, said analyst Matthew Lee, who has a buy rating on the stock.
A U.S. listing would also allow investors to compare Score Media against its U.S. rivals, according to Eight Capital analyst Suthan Sukumar, who also has a buy rating on the stock. Sukumar says the company’s plans to launch an online casino product this year is another “lucrative” catalyst.
Canadian Justice Minister David Lametti unveiled legislation last fall to legalize single-event sports betting in Canada, marking a change in direction for Prime Minister Justin Trudeau’s Liberal government. A second reading of the legislation, Bill C-13, is scheduled for Feb. 19.
Shares of online gambling companies like DraftKings Inc. have attracted attention from retail investors along with larger institutional players like Cathie Wood, as more regions move to legalize wagering activity. Penn National Gaming Inc. holds a small equity stake in Score Media as apart of a 2019 market access pact.
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