Landcadia Holdings (NASDAQ:LCA) is turning things around on Thursday, much to the delight of investors. After dipping on a handful of rumors, LCA stock is roaring higher today. Why? It looks like the special purpose acquisition company could soon be completing its reverse merger with Golden Nugget Online Gaming.
So what exactly is the story here? Well, earlier this year, billionaire Tilman Fertitta agreed to take his Golden Nugget Online Gaming assets public through the Landcadia Holdings blank-check company. Investors immediately chased LCA stock up, because everything about GNOG has been appealing in 2020.
It all started with a Supreme Court decision in 2018. Then, as states continued to change their legal landscapes to allow sports books, the novel coronavirus delivered another catalyst. Physical casinos closed down as the pandemic spread. That meant for many consumers, it was time to go to the world of online gambling.
With that backdrop, investors learned today that Landcadia Holdings is hosting a special shareholder meeting on Dec. 18, 2020. There, it will lead a vote to approve the proposed business merger with Golden Nugget Online Gaming. If all goes well, Golden Nugget will soon hit the Nasdaq Exchange and start trading under GNOG. For many online gambling bulls, this will be a dream come true.
Why LCA Stock Is Hot Right Now
Although the confirmation of SPAC mergers has largely been a bullish catalyst, there is even more to like about the story here. That is because Landcadia Holdings and Golden Nugget together are about to bring a company in a red-hot market to Wall Street. How hot? One report suggests the online gambling market will be worth more than $127 billion by 2027, representing a compound annual growth rate of 11%. Fueled by the novel coronavirus and stay-at-home trends, online gambling is going to keep heating up.
Granted, the story is not completely perfect for Golden Nugget Online Gambling. Some critics have pointed out the competition it faces from legacy casino names with larger physical footprints. Currently, GNOG makes most of its revenue in New Jersey. However, because Fertitta has casinos in states like Nevada, Mississippi and Louisiana, there is reason to believe expansion soon could be coming.
Additionally, investors struggled yesterday with news Fertitta could be taking more of his assets public through an initial public offering. Importantly, those assets include the physical casinos under the Golden Nugget brand. What would that mean for LCA stock and Golden Nugget Online Gaming? It may be too soon to tell.
For now, the upcoming shareholder meeting is what investors have been waiting for. Ahead of the vote, expect LCA stock to remain hot.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlcae.com.