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Shorter01, when you get a chance could you pls help me fill out the Bearish thesis. I need some more points in there to balance this up because it looks like the short term debt item has been derisked. Also the concerns about furlough payments being stop is gone. Also the payout from HMRC of 125-150 mil is progressing much earlier than expected. It also looks like sport it resuming and there is a plan to reopen the betting shops.

Could you give me a link to that info you had about the bundesliga betting volumes, I just want to update my lists.

The debt position is a lot more manageable with another 125-150m. Fred Done spearheaded that case with HMRC we have a lot to thank him for. Maybe in the coming few months he may do some other things that require our thanks. It will be interesting to see if there are some transactions here for WMH. My scenario is Fred done buys the UK betting shops and wmh becomes totally digital and concentrates on the USA. Tie up with kidred and 888 would be nice but it would distract from the main prize - USA

Getting short here may work out it's hard to predict the market in the coming months. In a year's time there is no way it trades at these levels

There will be a lot of positive events between now and q4 IMO. A lot of sports opening, betting shops opening, more vaccine news, better treatment news etc. Deal with Fred Done could be nice as well

https://www.linkedin.com/posts/hclang_flutter-onlinegaming-bet365-activity-6664196747985846272-2oPt

It's all a tongue in cheek, but jokes usually have some truth behind them. The comments are more interesting than the actual post and make me think about some sort of merger/ deal between WMH and one or more other companies. Maybe a sale of physical being shops to Betfred to make wmh totally online. Maybe merger with Kindred.

This has derisked one of my concerns about the debt position and covenants. Main concern now is that the macro picture deteriorates more than we thought in 2021 and the consumer is tapped out and doesn't have as much discretionary spend available. But then again this is gambling and people love to gamble. Good position all up.

Very good news on cash burn and liquidity. I liked the way the customers have moved to less well known betting markets like table tennis. Management have done their part and can see this out. It's up to sports administrators to open now.

Look at previous holding Vs new holdings and see if it goes up and down?

Anyone know how the Flutter AGM went today?

You will likely get shares in both wmh USA and wmh-classic. This will allow investors to have exposure to the USA via the spinoff or rest of world via wmh-classic. At present there would be lots of people who want to own wmh USA but don't necessarily want the lower growth ex USA business. As long as they don't cut a terrible deal in selling the USA assets the sale will be bullish.

I am thinking this spinoff event happens a few years in the future once WMH US has a track record of profitability. The us spinoff would likely trade at a much higher price to earnings than the rest of world WMH. Draft Kings apparent had a 3.3 billion USD valuation at end of 2019, the market is valuing it as a tech stock basically. WMH currently has about 900 mil GBP valuation all up. If William hill USA can keep even 10% of us sports betting, and betting keeps being legalised in more states, it will easily be worth more than the current share price of wmh.

It would be excellent news. It would likely let current WMH shareholders own the new company, likely listed on NYSE or NASDAQ while also owning the WMH share. So you could own two shares. Spinoffs usually do well and a spinoff like this would be well received by USA markets and would be seen as a growth stock there. The WMH ex-USA stock would lose its USA growth story and would need to demonstrate that it is able grow earnings without the US.

BULLISH

Long term:

A. US growth story, currently 25% of revenue, grew at 38% in 2019, nationwide US market share on sports of 25%. Further states opening. Estimated 150b in black market betting in the USA (believe it or not)
B. US strategic partnerships - Caesars, NBA and CBS
C. Possibility of US spinoff (2-5 years)
D. Inflation resistant business
E. Debt load benefits from inflationary environment
F. Bet Fred v HMRC case regarding FOBT machine VAT possibly being resolved, WMH to benefit with possible £XXX mil payout from HMRC

Short term:
A. Casino business may have increased revenue since lockdown (buoyed by recent Mr Green acquisition)
B. Resumption of sports (timing largely unknown)
C. Betfred stake may lead to takeover offer on WMH or merger offer (highly speculative)
D. CFO purchase of £ 280k recently

BEARISH

Long term:
A. Debt load - 375 mil due June 2020, 350 mil due 2023, 350 mil due 2026
B. UK regulatory environment may worsen. Regulatory trend is not good for WMH (limits in bet size on online casinos next?)
C. EU and Rest of World regulatory environment may worsen

Short term:
A. Consumer may have more time but less money to bet in the coming 12 months+. 30 mil unemployed in US market
B. Covid 19 closed most sports (53% of revenue)
C. Covid 19 closed betting shops in UK (retail stores were approx 48% of revenue at April 2019, may have shrunk during the year)
D. FT.com estimates covid 19 cash burn with furlough factored in at 24 mil per month. Reduction to 80% furlough by UK government could increase this.
E. Return to live sport may be slower than is priced in. Tennis is looks especially dicey. Industry splits UK sports betting - football 54%, racing 32%, tennis 6%, other 8%
F. Debt of 375 mil of June 2020 bonds due imminently
G. Debt covenents on all 3 bonds may be broken in short term (but may be ignored by bond holders) Cash of £459.4 mil at end of 2019. Revolving credit facility of 425 mil.

I've done some betting my time as well. You have a lot more chance making money on this stock than betting against them on their website. They have debt due in June 2020 and have more debt due in coming years, this debt is a risk of course. There are a lot of unknowns at the moment around when sport returns, we are all making guesses really. My suggestion is do not look at the share price for 12 months, it's going to go up and down between now and then but in the medium term you will be fine.