PokerStars Loses 7% of its Traffic – Here’s Some Possible Reasons Why
The CEO of Amaya, the company that owns PokerStars and Full Tilt, has made a bid to purchase his own company. David Baazov and a group of private investors have offered to purchase Amaya and all of it’s subsidiaries in an effort to take the company off the stock market and make it a private organisation. What would this mean for PokerStars? We investigate to find out more.
Buying Out Amaya
Although it was rumoured at first, Baazov has confirmed that he indeed make a $3.8 billion bid to buy out Amaya from the public stock exchange and make it private. The move comes at a time when this Canadian gambling giant has experienced a rough patch in terms of its stock value.
Ever since Amaya acquired PokerStars, it has seen the share value fall from $38 to just $12.88, and that’s due to a variety of reasons. The most notable internal reason is the delay of the PokerStars sportsbook rolling out and an external reason for the tumbling shares is the relatively strong US dollar. Plus, there is also the lawsuit worth $870 million that the state of Kentucky has launched against PokerStars.
That’s why Baazov’s offer to privatize the company at $15 per share would allow him to own buy 550,000 more shares than he currently owns – 24.6 million shares of Amaya that amount to 18.6% of the total. And this isn’t all just hot air: the company has already set up a formal committee that will evaluate the cash offer, but stated that “there can be no assurance that Mr Baazov’s offer will ultimately result in a completed transaction.”
Honest Move or Strategy?
All of this buying-out talk begs the question. Is this a strategic market move to privatization or an honest wish to get Amaya back up on its feet again?
Market analysts state that such bids and transactions of buying shares of own companies and taking them into private hands after being on the public stock exchange could be a strategy. It would allow for Amaya’s shares to halt the drop in value and companies have successfully accomplished this in the past. After the rough times were over, the companies often return to public stock trade markets and grow their value.
Yet, it could also be an honest move. Having the company in private hands would allow for it to make riskier decisions business-wise and thus have an edge over its competitors. Whatever happens with Amaya and, of course, PokerStars, it’s likely to have some effect on the players. Yet, all we can do now is sit and wait for the newest developments which we will definitely write about in our News section.
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