Posted on: 23 November 2022, 09:58h.
Last updated: November 23, 2022, 9:58 AM.
When it comes to capital market transactions in the US, Flutter Entertainment (OTC: PDYPY) is usually mentioned as a possible spin-off of part of its FanDuel unit to public investors.
Some investors think the gaming company might want to consider more than that, moving its primary listing to New York from London. The topic was mentioned last week at Flutter’s investor day, where the operator praised FanDuel’s success.
Gravity Capital shareholder Adam Seesell suggested the switch, noting that trading volumes on UK exchanges were relatively small. For example, DraftKings stock has about 6x the trading volumes of Flutter, despite being a quarter the size,” Eilers & Krejcik Gaming (EKG) noted in the most recent addition to the research firm’s weekly “EKG Line” report.
DraftKings (NASDAQ:DKNG) is one of the few pure play iGaming and sports betting companies trading in New York. The average daily turnover in the name is 21.15 million shares, according to data from Finviz.
Moving can make sense for flutter
London is the capital markets center of Europe and it is one of the busiest stock exchanges in the region, which means that Flutter is not necessarily constrained by its primary listing. It is a member of the FTSE 100 Index, the most widely observed gauge of UK equities. The gamin share also accounts for nearly 20% of the MSCI All Capped Ireland Index, making it the second largest component in that benchmark.
In addition, apart from FanDuel, the Irish company’s brand portfolio is strongly European, meaning its brands are known to investors there. However, retailers are more engaged in the US than in Europe and that segment of market participants has a long history of embracing gaming stocks.
Peter Jackson, CEO of Flutter, acknowledged at the company’s investor day that DraftKings benefited because so many of that company’s US-based clients also trade the stock.
In addition, a New York stock exchange listing is considered prestigious in the investment community and increases a company’s access to capital. Flutter isn’t saying it should raise money, but the pursuit could be more efficient, particularly in debt markets, with a US listing.
Other Potential Benefits to US Listed Flutter
A listing on a US stock exchange can serve other purposes for Flutter, including placing the stock in front of a broader group of market participants, including both professional and retail investors. Flutter is currently traded over-the-counter in the US, meaning some pros can’t buy the stock and some casual investors just won’t buy it.
In addition, a listing in New York could give Flutter the opportunity to tell more of his story to more investors. While American gamblers are familiar with FanDuel, many investors are unaware that Flutter is the largest online gaming company in the world.
In fact, the market cap as of November 23rd is close to $25 billion. By that measure, Flutter would be the second largest trading gaming stock in the US, trailing only Las Vegas Sands (NYSE:LVS). Putting $25 billion into context, that’s more than the combined market value of MGM Resorts International (NYSE:MGM) and Wynn Resorts (NASDAQ:WYNN).