ASX Watch: Surging PointsBet Continues to Impress

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In June, I told you that it’s time to pay attention.

Here’s why…

PointsBet Holdings Limited [ASX:PBH] is up over 13% at the time of writing today. That’s the stock I brought to your attention back in June.

And the reason for this rise is simple…

PointsBet has just partnered with Penn National Gaming.

On the surface, this partnership sounds pretty ordinary. But as I’ll explain below, it’s actually significant news.

In case you missed my original update on PointsBet, here’s some background information on the company…

Who is PointsBet?

PointsBet is a corporate bookmaker operating within Australia and the US state of New Jersey.

It built its platform to make sure that all its systems and services were interconnected and accessible anywhere in the world.

Yes, that means you can bet 24/7. And punt on sports from anywhere on Earth.

At the time, PointsBet had 45,000 clients. Today, that number is well over 120,000.

Remember, I brought PointsBet to your attention just two months ago…

So, why am I bringing them up again now?

They’re the first in the world to use a betting system called Points Betting.

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As you may know, Points Betting is a wagering system where your outcome isn’t determined until the clock hits zero.

If you want that in laymen’s terms, check out my original article here.

Now, I’ve got some exciting updates to share with you.

Keep this one on your watch list…

Back in June, I suggested that PointsBet deserved a spot on your watch list.

We’ve seen it rise over 50% since then.

And I believe it still deserves a place on your watch list.

I want to take a moment to highlight the company’s recent investor update.

Net revenue from FY18) to FY19 rose 172%, from $9.4 million to $25.6 million. 

From FY18 to FY19, the company’s user base grew from around 40,000 to over 120,000. That’s an increase of 254%.

And of those users, over 80,000 are considered active, meaning they’ve bet in the last 12 months.

Pretty incredible, right?

But wait — there’s more.

As I said earlier, PointsBet has announced a new partnership with Penn National Gaming (PNG).

This partnership will allow PointsBet to gain immediate access to another five US states.

The agreement will last for 20 years, and gives PointsBet the option to expand into as many as 10 US states.

There’s another point worth mentioning…

PointsBet will issue PNG 10,372,549 options, exercisable at $4.75 per option. They can be exercised at any point before 12 September 2021.

As a result, PointsBet will also pay PNG a portion of the net gaming revenues from each state.

The stock jumped higher today, as you can see in the chart below. For that reason, I wouldn’t go chasing it. As I said, this is one for your watch list.

Source: TradingView

This article is not a recommendation to buy or sell PBH. It’s an update only.

I hope you found it helpful.

Until next time,

Jonathan Evans Signature

Jonathan Evans,
Analyst, Profit Watch

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