Would you like to buy an IPO? Sofi Active Invest allows you to participate in upcoming initial public offerings before they are traded on an exchange.
Since the advent of the internet, observers have long recognized the potential of technology to disrupt the gambling industry. Instead of traveling to Las Vegas, participants could place their bets online and expand the consumer base exponentially. However, federal laws that prevent certain activities, particularly online sports betting, hampered the use of the internet for gaming purposes.
However, a groundbreaking legal victory in the New Jersey Supreme Court in May 2018 opened the door to sports betting and allowed any state to legalize the practice if they so chose. This decision, in turn, made the forthcoming initial public offering (IPO) easier for Gambling.com group.
Sports gambling enthusiasts should keep an eye out for July 21, 2021. That is the date set on the IPO calendar for Gambling.com’s debut in the public market. The shares are traded on the Nasdaq under the ticker symbol GAMB.
Gambling.com Group’s filings with the Securities and Exchange Commission indicate that the company will offer 7.5 million shares of common stock with certain prospective buyers. Underwriters also have a 30-day option to purchase up to an additional 1.125 million shares at their original offer price.
Gambling.com’s management team expects the IPO to price between $ 11 and $ 13 per share. The company will raise $ 90 million in the mid-range of the offering. The lead underwriters of the new issue are Jefferies Financial Group (NYSE: JEF), Stifel Financial (NYSE: SF) and Truist Financial (NYSE: TFC).
Among the most anticipated IPOs based on internet traffic data, GAMB stock will enter a competitive arena, moving to DraftKings (NASDAQ: DKNG), Golden Nugget Online Gaming (NASDAQ: GNOG), and Penn National Gaming (NASDAQ : PENN) join its partnership with Barstool Sports, among others. The new offer offers investors another opportunity to participate in the burgeoning online sports betting market.
Gambling.com Group’s financial history
A multi-award winning performance marketing company, Gambling.com focuses primarily on the iGaming and sports betting markets. His main source of income is the referral of gambling enthusiasts to online gambling providers. Here the company benefits from two catalysts, the most important being the legal tailwind that opens the door to online sports betting in the US.
While the buzz for Gambling.com’s upcoming public debut is simply extraordinary, investors should note that it has a relatively small financial footprint compared to the big players in the online gambling space. In the private equity space, for example, the company only had one round of funding, with securities services firm Edison Partners raising $ 15.5 million on September 5, 2019.
However, it is also fair to point out that as a marketing company, this is not a direct play on the online gaming phenomenon. In addition, the smaller financial profile of GAMB shares allows for greater potential for profitability, as speculators – driven by social media channels, for example – could drive stocks much higher than the IPO price.
Most importantly, Gambling.com’s financial data itself is impressive. In 2020, the company had sales of nearly $ 28 million, up 45% from $ 19.3 million in 2019. While the company suffered a net loss of $ 1.9 million in 2019, Gambling.com posted positive net income of over $ 15 million in 2020. Being profitable from the start will surely put confidence in those who bet on GAMB stocks.
When it comes to the Gambling.com Group’s upside potential, potential buyers focus on the underlying numbers which are incredibly enticing. According to a Market Research Future analysis, the global online sports betting market is expected to grow from nearly $ 25 billion in 2019 to $ 59.5 billion in 2026, an average annual growth rate of 13.6%.
However, other estimates suggest an even more lucrative environment for GAMB stock. For example, Grand View Research states in its report that the global online gaming sector was valued at $ 53.7 billion in 2019. The company forecasts sales of $ 127.3 billion by 2027. For context, DraftKings’ market cap at the time of writing is $ 17.6 billion. Thus, Gambling.com and the entire industry benefit from a massive addressable market.
Additionally, the sports betting legalization movement has gotten off to a good start since the New Jersey Supreme Court ruled positive. According to ESPN.com, 22 states had already legalized sports betting shortly before the GAMB stock went public. And 8 states recently passed bills suggesting growing public demand.
Note, however, that the legislative development is not entirely positive. Among the top 10 countries by gross domestic product (GDP), 4 of them – California, Texas, Georgia, and Washington – have difficult legal frameworks. A prime example is California, where sports betting is a reality but only in tribal casinos. Remember, these 4 states represent roughly 29% of US GDP.
Still, the end result could be the COVID-19 crisis, which may have sparked at least a semi-permanent change in consumer behavior. Also, a dubious surge in the pandemic would incentivize online activity, thus taking advantage of GAMB stock.
Typically, financial advisors discourage beginners from going public because of their complexity and potential volatility. But if you’re interested in pursuing new topics, it helps to have some background on the process.
An IPO is an example of a primary market transaction. Here a company creates new equity shares and sells them for the first time, usually with the help of underwriting finance companies that bring institutional investors together with the new equity issuer.
In the past, public private clients were excluded from the IPO process because institutional clients are more profitable for underwriters. As a result, most individuals buy stocks in the secondary market, such as the Nasdaq or the New York Stock Exchange.
While this avenue is often more expensive, you can attend public launches with no obligations to purchase other stocks prior to going public. And the process is easy. If you already know how to buy stocks, you can get started right away. If not, just follow the steps below.
Step 1: choose a broker.
In previous generations, investors often chose brokerage for reasons of cost. Today the focus is on functions. For example, a growing number of online brokers and mobile investment apps such as Robinhood allow private buyers to participate in the pre-IPO process; that is, the ability to buy new shares at their original asking price.
If you are interested in building your IPO portfolio, consider brokers that provide easy access before going public. Below is a list of the best brokers to choose from.
Step 2: decide how many shares you want.
Since your number of stocks determines your risk / reward profile – a higher number equals higher potential returns, but more risk and, conversely, a lower number – you should choose a number that you are comfortable with.
Step 3: Choose your order type.
Before placing your order, familiarize yourself with these store concepts:
- Offer: The highest price a buyer will offer, the bid is always lower than the letter.
- Ask: The lowest price a seller will accept, the ask, is always higher than the bid price.
- Spread: First and foremost, the difference between the bid and ask price, the spread is also an indicator of risk and liquidity. Tighter spreads indicate a high willingness to negotiate and thus higher liquidity and lower risk. The opposite is true for wider spreads.
- Limit order: An order that is to be executed at a given price, limit orders, offer full control, but no execution guarantee.
- Market organization: A market order guarantees fulfillment at the current price, but under the most unfavorable conditions (like buy orders on the ask side).
- Stop-loss order: Use a stop-loss order to automatically protect you from downward volatility. However, such orders are carried out either at a predetermined price or at a lower price than the requested price.
- Stop limit order: A stop limit order will only leave your position at a predetermined price, which can be a burden if the target stock continues to fall.
Step 4: execute your trade.
To execute a market order, do the following:
- Choose your type of action (buy or sell).
- Enter the stocks you want to buy (or sell).
- Click the Buy (or Sell) button.
Follow the same sequence for limit orders, except that you also enter your desired execution price.
GAMB Restrictions for Retail Investors
Read the Financial Industry Regulatory Authority (FINRA) regulations on restricted persons before going public. In short, securities laws punish those who try to illegally use privileged information.
In general, because of the higher profitability profile, IPO underwriters eschew regular retail buyers in favor of institutional investors (such as mutual funds). Recently, however, companies like ClickIPO have been helping to democratize the rare IPO market by buying stocks of select companies that are planning an IPO. From there, they distribute those pre-IPO shares to interested public buyers.
ClickIPO does not currently offer pre-IPO shares of GAMB shares.
Pull the handle on the GAMB shaft
Gambling has always attracted people. But with the compelling combination of connectivity technologies and a favorable legal environment, the Gambling.com Group’s IPO has already attracted millions of private investors. While there are some headwinds, the positive public sentiment and random impact of COVID-19 make GAMB stock a fascinating bet.
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