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Active Member Straws
#Bull Case
Last edited 4 months ago

This is very early days, but what catches my eye is:

1) Australian market growing at 66%, with evidence of scaling through slowing cost growth.  

2) PBH has access in 11 US states (subject to enabling legislation), with a proven ability to win licences in partnerships or standalone.  9 of the 11 states are yet to commence operations.

3) Founder led, with an experienced management team, with significant skin in the game.  

With a very small market share, in a rapidly growing industry, driven by online / realtime / interactive betting, pointbet has a a huge opportunity.  

4) Google trends and App downloads indicate there was a healthy uptick in searches / downloads early September, which co-incides with teh announcement of their ambassador, Allen Iverson, which is a positive sign that management are executing well on their marketing campaign.  

5) Regulated competition.  Sportsbet will only have 2 or 3 competitors in each state, as the regulators will restrict the number of players.

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#H1 FY20 Results
Added 3 months ago

Wow, experiencing significant buyers remorse with this one.  

1) Revenue up about 126%

2) Expenses up 266%!  Ok, there has been significant investments in USA.  

3) Churn.  Registered clients grew by 122K over pcp, yet this converted to just 56K active clients.   Churn looks very high, and this is a real concern, as marketing costs are $168 per registered client.

I don't like the high churn rate, and PBH is up against Draft kings and Fan Duel.   Tough competition with deep pockets.   PBH may suceed, but given they are not the top dog, the probability of this is below 50% IMHO.   


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#Bear Case
Added 4 months ago

Livewire Markets's 'Buy, Hold, Sell' video - Two fundies rate PBH a 'HOLD' and 'SELL' due to:

  • Amount of money being spent to acquire customers
  • Concerns about ability to compete against large established competitors

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#ASX Announcements #trading
Added 4 months ago

SOI 130,284,520
Escrow 22,216,235
Options 21,676, 092 – Various strike prices between 25c and $3.05
Total 174,176,847
SP 5.88
MC 971,906,806

Release of the quarterly report in conjunction with an announcement informing the market that PBH had secured Kansas Market Access resulted in an initial surge up to $6.10 before dumping down to $5.00 before closing out the day at $5.58.
I had been taking some off the table on the run up to highs selling on the 16th of Jan before buying back some on the 21st which I think I put out on my Twitter @RealYowie During the mornings trade, and after the above mentioned release, I found myself stopped out at mid $5.50s before it dumped right down to 5 flat. I felt the reaction was a bit over the top so bought at $5.10 and then a few more parcels up to $5.20 my target for the day was $5.63 which would of been just about bang on the 20day MA and did intend selling some out if it didn’t hit but the last half hour volume kept me in, the subsequent action overnight in the US might see me regretting not sticking to that plan.

Now to the quarterly report.

During the quarter PGH spent $10.9M on customer acquisition which using the total registered client growth of 122109 puts the price per customer acquisition at $89.26 which is high and will require future analysis vis the registered/active user metric to determine how many of these new users are sticky. The formulation of customer acquisition costs are through bonus bets, money back offers, early payouts etc which are fairly standard across the industry. The average active users account cash balance is $94.75 which as the company grows presents unique opportunity common to this business model and others, (think insurance companies).

Of particular interest 80% of clients are still AU based however turnover was 184.8 (AU) vs 112.5 (US) so despite only accounting for 20% of the client base the US resulted in 38% of the turnover. PBH currently has access to 12 US states (subject to legislation and licensure) with an addressable market of US$5.2 billion so the growth potential really is significant

Cash burn next quarter is quite high at $39.5M against cash at hand of $157M which is where I feel the selloff had its origin. The business model is capex intensive and will remain so for the immediate future however this space is particularly acquisitive;

Acquisition is ultimately where I feel this is going, they have a strong team and so long as they continue to execute on their plan I will remain bullish and continue to trade this name.

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#Bull Case
Added 3 months ago

PointsBet and NBA Announce Multiyear Sports Betting Partnership

They may be burning cash at an alarming pace but are currently still delivering on the growth story.

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Added 3 months ago

Another US deal in this space. The Wall Street Journal reports, 11/2/20, this deal has the following objective.  "The logic of the deals is sim­ple: Sports books, which sud­denly have an op­por­tu-nity to reach cus­tomers across the U.S., are re­ly­ing on me­dia com­pa­nies to de­liver po­ten­tial bet­tors. Me­dia com­pa­nies, mean­while, are sell­ing ac­cess to their au­di-ences and seek­ing spon­sor-ships for new con­tent aimed at gam­bling en­thu­si­asts."

"Sports-bet­ting op­er­a­tor William Hill US and Vi­a­com­CBS Inc.’s CBS Sports have agreed to a deal that would en­able the gam­bling com­pany to seek new cus-tomers among the me­dia gi­ant’s au­di­ence, the com­pa-nies said Mon­day.  William Hill agreed to pay CBS Sports a fee for ac­cess to its au­di­ence and spon­sor­ships across CBS Sports con­tent, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. The deal, which in­cludes in­cen­tives for hit­ting cer­tain tar­gets, is aimed at get­ting CBS Sports users to down­load the William Hill bet­ting app and put money into their bet­ting ac­counts, the peo­ple said."

PBH is facing the significant competition across the US landscape. While it's app is unique (I am a New Jersey resident and have used it several times throughout the college football season) if people are being driven to other solutions, it will be hard for them to thrive here in the US market. CBS shows major sports events on a national basis. Lots of Eyeballs.

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#Bear Case
Added 2 months ago

As someone who's lived in North America most of my adult life and is a huge sports fan and even bigger fantasy sports fan I think PBH is really overhyped/misunderstood by a lot of Aussies.

They're not first movers and from what I can tell don't have a competitive advantage.  In fact I'd argue their competitors have the advantage of already having a large client base already playing fantasy sports on their sites.  Customer acquisition cost will be minimal for their competitors (fanduel etc).

I haven't delved into them extensively but for this reason I'm very bearish on them.


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#Bull Case
Added 7 days ago

Even if not established as #1 provider over Draft Kings, the addressable market is insane. Hoping management leverage their international experience and grow fast in the States. 

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