Digital casino company Golden Nugget Online Gaming (NASDAQ:GNOG) isn’t the only i-gaming company on the market, but it sure is a popular one. And while GNOG stock hasn’t been publicly tradable for very long, it has become a major talking point among financial commentators.
Much of the buzz surrounding GNOG stock is due to the irrepressible character of Tilman Fertitta. He’s the owner of Golden Nugget Online Gaming.
Fertitta is also famous as the owner of the Houston Rockets basketball team. He’s worth around $4.2 billion, and evidently he knows a thing or two about bringing value-added businesses to the market.
And after much waiting and anticipation, Fertitta was finally able to bring GNOG stock to the public via a special purpose acquisition (SPAC) deal. Yet, that begs the question of whether GNOG is worth investors’ attention and capital.
A Closer Look at GNOG Stock
Not to brag or anything, but I made a bullish recommendation on GNOG stock on Oct. 1. Back then, it was in the pre-finalization SPAC phase and was trading as Landcadia Holdings II (LCA) stock.
Prior to that, LCA stock had stayed near the $10 level as the investing community awaited more information. Since people didn’t know which company would be Landcadia’s acquisition target, there’s wasn’t any reason for the share price to move much.
By the time I issued my bullish call on LCA stock, the share price had already popped above $18 and then dropped to $14.40. I won’t claim that I caught the exact bottom of the price move.
Yet, I can say that LCA/GNOG soon rocketed higher, reaching a 52-week high of $26 on Dec. 30.
Fast-forward to Jan. 15, and we can see that GNOG stock settled lower at $20.76. Therefore, prospective investors have an opportunity to own the shares below the peak price.
A Long Journey
Today, it seems so long ago that Landcadia Holdings II announced it would acquire Golden Nugget. In actuality, that even took place in late June.
At that time, the press release boasted that “GNOG will become only the second pure publicly traded online casino company in the US.” To be perfectly honest, though, Golden Nugget has two prominent competitors in the market.
It took quite a while for the SPAC deal to be completed. Nearly half a year after the Golden Nugget deal was originally announced, a virtual meeting was scheduled on Dec. 18 for LCA shareholders to finally vote on the big merger.
At long last, the reverse merger was finalized on Dec. 29. And with that, Fertitta’s vision was fulfilled and GNOG stock started trading on the Nasdaq Exchange.
I’ve already mentioned that GNOG stock touched $26 at one point. Could it get there again and keep on going? Benchmark’s Mike Hickey seems to believe so.
He recently assigned GNOG stock a “buy” rating along with a $27 price target. And, Hickey’s arguments in favor of Fertitta’s company are hard to dispute.
In particular, Hickey points out that Golden Nugget Online Gaming’s strong balance sheet is “supportive” of planned investments and efforts to enter new markets.
Moreover, Hickey sees the digital gaming and sports betting markets as “potentially massive and accelerating.” And the data does indeed suggest that Golden Nugget is well positioned to capitalize on this market’s acceleration.
In fact, Golden Nugget’s gross gaming revenues increased by a whopping 93% year-over-year during the third quarter. During that same time frame, Golden Nugget’s net revenues and operating income both improved year-over-year by 92%.
The Bottom Line
Fertitta certainly seems like a business-savvy individual. So far, he appears to be doing well with his investment in the i-gaming business.
Now that the transition from LCA stock to GNOG stock is in the rear-view mirror, investors can relax and partake of Fertitta’s profitable online-gaming venture.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.