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Scientific Games Corporation (SGMS)
NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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9 billions in debt for this company. That's billions with a ''B''.
The stock could correct itself all the way down to 40$ and it'd still be grossly overpriced.
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Scientific Games is up 7.85% to 50.02
Yahoo Finance Insights
Scientific Games is up 8.29% to 54.62
owning this stock is a real GAMBLE!
Scientific Games (NASDAQ:SGMS) Price Target and Consensus Rating
Today 90 Days Ago
Consensus Price Target: $36.50 $27.75
Price Target Upside: 397.28% upside 2.85% upside
SGMS core business is still free with a negative $100m value. It’s 82% ownership in SCPL is worth $1.23b while the entire sgms market cap is currently $1.1b.
Fox chart new short term target 31.83
Market cap 500mill and their revenues are in the billions. This stock will rise above $15 within 3 months.
Check out the new 8k. Confirms 82% interest in cash rich and debt free scpl. Cut quarterly costs and drew down $480m credit line. Plenty of liquidity. Eat it shorts.
Trading at a discount to ownership in SciPlay? Market assigning negative value to SGMS?
Yahoo does not like when an insider buys shares. For some reason they will not publish Perlemans 200k buy
In the near future sports betting will be in every state along with the pot sales for the tax revenue. Long SGMS
a $310 million charge related to the verdict in the Shuffle Tech legal matter. Appeal reduced by 2/3rds
....is this the main driver for the stock jump? ...:
Scientific Games exited the quarter with cash and cash equivalents of $1.21 billion compared with $168.2 million in the previous quarter.
Institutional investors buy controlling (though a bit less than 50% stake) from controlling individual shareholder at a huge premium. However, the price for this stake was about the size of annual interest expense of SGMS. Moreover, they seem to not accumulating the stocks prior the transaction at 30% discount compared to what they paid to Perelman (at least, I haven't seen any sec reports about that thus far). Thus, based on available information one can conclude, that they wanted to simply get rid of Perelman, therefore, they paid such huge premium.
Explanation 1: They also own debt and wanted to avoid debt problems when dealing with Perelman. Pro: $700m annual interest was pretty close to what they have paid for the control; Not much evidence of them acquiring on open market, so they only needed to get rid of Perelman. Possible results for minority shareholders: dilution to improve debt stance, costly debt restructurings, divesting of the growth assets.
Explanation 2: Caledonia is after SGMS growth assets (app business SCPL), potential deals in betting, etc. Basically, same arguments as above. Possible results for minority: divesting of the growth assets, leaving minority and debt holders with casino related legacy business
Explanation 3: Caledonia is about to grow SGMS for the benefit of all shareholders: Pro: SGMS still generates some cash, and in 0% environment you can justify some multiples; also, there are some growth assets. Contra: they seem not to be buying shares before deal at below 20 (though, they might disclose such purchases later); also SGMS has deeply negative equity and huge debt, while core business is weak and will be weak for a while, and growth sector (SCPL) might also see some decline. Basically, creditors have been taking all the free cash flow for a while. In this scenario they can pump the share price in the short term based on all online casino/sports betting announcements by state, however, the long-term plan seem vague, since SGMS in a relatively weak position compared to other players in these markets. Though, they can dump their stake at even higher premium into something hyped like DraftKings. Again, if they selected this path, why didn't they accumulate below $20?
Sgms was briefly trading above its value in spcl yesterday but is back below. Spinn out scpl interest to sgms shareholders and see if the stock trades to zero as the current price suggests. Management should confirm and enhance shareholder value by highlighting that the core business is implying negative value / trading for free. I will buy free optionality on sgms all day long.
Q1 call was good and not sure why down -5% after hours. Confirmed about $1b in liquidity with worst of burn expected to be -$70m to -90m in Q2. SciPlay growing strongly with 20% rev increase from March to April. Lotto revs down but continuing to generate rev and bouncing back. Importantly confirmed covenant relief on debt and no near due dates. Adding.
Ronald Perelman Buys over 1.5 MILLION shares (12/18-6/19) Why?
The company has $8.4BILLION in debt.
Hmmm, if TRUMP moves interest rates to ZERO that debt will become manageable and the company has good cash flow and a lock on all the technology. Made a MILLION off Bally's. got out too soon :( Missed the shufflemaster deal :( But SGMS owns ALL of them now. People gamble in good times and bad. Lowering interest rates hurts savers and helps debtors. SGMS will benefit from lower rates.
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