4 weeks ago v now - why the drop of 50p1 Jul 2020 09:56
Since the peak of 163p on June 5th the following has happened:
The return of Premier league football, championship, as well as the Spanish leagues, Italy and almost every top division league in Europe apart from Holland, Belgium and France is now running.
Covid deaths have decreased week on week.
Corona virus vaccine has now started testing on people, with a potential roll out within 3 months.
We are out of lockdown.
WMH announced that the VAT refund which originally was thought to be £125–150m is more likely to be £200m.
WMH announced a trading update which was far better than originally expected, revenue for first 23 weeks of the accounting year down just 33%, but with a much reduced cost of sales.
Share placement carried out to raise an additional £234m in capital to make WMH financially stronger and able to grow the company.
The negatives:
Fear of a second coronavirus spike. My counter argument is that a vaccine is just months away and the first spike when all was unknown only halted football and horse racing 10 weeks. Punters were still betting, on things as daft as table tennis and football resumed in countries like Belarus, which punters switched to.
American sport other than PGA golf has not resumed. Counter argument - it will return soon and as we saw in the UK people in America who like to bet will still bet but switch from their usual sports.
The markets are struggling but not to the extent of WMH’s drop in share price. Counter argument - they are struggling but they will pick up and the markets have not effected Flutter who have reached record highs in recent weeks. In addition to this sports betting is done by the same groups of people and it’s addictive, people don’t usually go from betting regularly to stopping.
California didn’t manage to get a vote through to the public to vote on whether sports betting should be legalised. Counter argument- it was always a long shot given it had to pass two votes and get 2/3 of the vote. It is a shame but WMH hold licences in 9 states in America and will compete for many more -there are 40 other states and Europe. The opportunities for growth are there still.
Betting shops are open but not many people in towns. Counter argument - if you’ve ever been in a bookies regularly you always get the same characters in there and you’ll get young lads picking up betting sheets. These people will still be in the bookies.
I am sure there are other things that have happened that I have missed.
All I can say is that this drop in share price cannot he as a result of events that have happened but is about market makers manipulating the share price by driving it down for so long and so low. This is not a fair share price whatsoever. What is their game?