Red Flag

I nopticed in the latest quarterly that both PBH’s managed security provider and media and tech adviser are owned and/or run by PBH board members. In my view it’s a bad look that companies closely affiliated with PBH directors are being paid by PBH for services. IMHO no matter how much they say the Directors are at 'arms length' it's a clear conflict of interest and should never have been allowed.

Specifically, Executive Director Manjit Singh is the founder, owner and director of PBH’s managed security company, DruvStar. DruvStar was paid $0.4M in Q2.

Non Executive Direct Kosha Gada is the CEO and MD of PBH’s media and tech adviser Recastled. Recastled was paid $0.1M in Q2.

In September, New Jersey became the first U.S. state to generate more than $1 billion in sports betting in a single month by taking in $1.01 billion in wagers in September, according to PlayNJ, which tracks gaming developments in the state.

Eric Ramsey, an analyst for the PlayUSA.com Network, which includes PlayNJ.com said "The relentless growth in online sports betting and casino gaming continues to lift the entire industry."

According to official reporting released on Monday 18th October, New Jersey's online and retail sportsbooks attracted $1.01 billion in September, breaking the state and U.S. record of $996.3 million that New Jersey set in December 2020. September's volume was up 35.1% from the $748.6 million generated in September 2020, up 52.1% from $664.7 million in August.

This is excellent news for Pointsbet as it shows the continuing growth in online sports betting in the US and the massive market potential there as more and more states open up to online sports betting. The "rising tide lifts all boats" as they say.

On October 13th 2021 Pointsbet announced that PointsBet Canada has entered into an agreement to become the exclusive sports betting partner of Curling Canada.

This announcement was listed as non-price sensitive news which I can kind of understand as it's not immediately financial but still points to their continued expansion.

According to the announcement, more than 13 million viewers tune in to Curling Canada’s events every season. That ranks it among the highest-rated sports in the country.

The agreement also includes complete category exclusivity covering the company’s Sports Book and Online Casino for all Curling Canada event broadcasts.

PointsBet expects to launch operations in Ontario in the first quarter of 2022, pending regulatory approvals.

On 28th October 2019, PBH provided the market with an unaudited update on its performance during Q1 FY20

"

According to the release, the corporate bookmaker’s turnover jumped 138% over the prior corresponding period to $235.8 million during the quarter. Also rising 138% was PointsBet’s net win, which came in at $11.8 million.

Net cash from operating activities was negative $8.8 million. Combined with its ~$8.5 million investment in its U.S. business development, PointsBet’s cash balance fell from $75.9 million to $57.6 million.

Driving the strong turnover growth was its expansion in the United States and solid performance in Australia. This helped take its registered clients to 148,902 during the quarter, up 223% on the prior corresponding period. Active clients also rose strongly and increased 166% on the same period last year to 87,391."

Full article: https://www.fool.com.au/2019/10/28/pointsbet-reports-strong-growth-in-q1-and-announces-122-1-million-capital-raising/

Nice to see turnover and net win growing strongly but burning a lot of cash in the land grab, hence the simultaneously announced cap raise.

After market close on 28th October PBH asked for a trading halt and annouced a large capital raise of $122.1 MAUD, as well as a trading update to end of September 2019.

"According to the release, PointsBet will raise $122.1 million through a fully underwritten capital raising. This comprises a $60 million institutional placement and a 1 for 6 accelerated pro rata renounceable entitlement offer with retail entitlements trading to raise $62.1 million.

The placement to raise $60 million will be undertaken at $3.60 per new share. This represents a 13.9% discount to PointsBet’s last closing price of $4.18. Whereas the 1 for 6 entitlement offer will be undertaken at $3.20 per new share. This is a 23.4% discount to the last close price."

Full article: https://www.fool.com.au/2019/10/28/pointsbet-reports-strong-growth-in-q1-and-announces-122-1-million-capital-raising/

It's a big capital raising but I'm glad to see retail investors being given even footing withh the insto's at least.

Couple of recent bullish articles on PBH on livewire:

https://www.livewiremarkets.com/wires/finding-the-next-afterpay

https://www.livewiremarkets.com/wires/our-new-top-growth-pick-pointsbet

I am bullsih on this stock as well. The upside US market potential is huge and the downside risk if they fail to really make it, will most likely result in them being bought out by one of the bigger players.