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Why Is Golden Nugget (GNOG) Stock on Watch Ahead of May 6?

Golden Nugget Online Gaming (NASDAQ:GNOG) stock is back in focus today. Investors are speculating on social media that DraftKings (NASDAQ:DKNG), which has agreed to buy Golden Nugget Online, will provide an update on the deal on or before May 6. On that day, DraftKings is due to report its first-quarter results.

A man opens the DraftKings (DKNG) app from his iPhone. DraftKings is an American daily fantasy sports contest and sports betting operator.
Source: Tada Images / Shutterstock.com

Golden Nugget Online Gaming consists of the online casino and online sports betting businesses which were spun off by casino owner Golden Nugget.

In August 2021, DraftKings announced plans to acquire Golden Nugget Online Gaming for $1.56 billion. Under the initial terms, GNOG stock holders would receive 0.356 DKNG shares for ever share of GNOG they hold. At the time of the announcement, this was a 53% premium.

What Is Happening With GNOG Stock?

Since then, chatter around the pending acquisition has been largely quiet. That changed on March 11, when DraftKings CFO Jason Park reported that his company’s takeover of Golden Nugget Online Gaming was “imminent.” On March 16, PlayUSA noted that the acquisition was expected to be finalized “in early 2022.” Now, some investors think May 6 is a key date that could bring more information.

Earlier this month, DKNG stock rallied after the company said that it would “look to enter Puerto Rico.” Nonetheless, the shares have tumbled 45% so far this year and 73% in the last 12 months.

In a March 9 column on DraftKings, InvestorPlace contributor David Moadel wrote that “It won’t be easy for the shares to mount a sustained comeback” and contended that “[u]ntil DraftKings can turn its financial results around, though, this Cinderella-story-gone-wrong will not have a happy ending.”

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/why-is-golden-nugget-gnog-stock-on-watch-ahead-of-may-6/.

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