The #1 online casino company $RSI is primed for autism
Positions: $RSI 30 03/19 30C Proof: https://imgur.com/a/swCCMjz *This post is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice.* TLDR: Rush Street Interactive ($RSI) is the #1 nationwide online casino company and the #3 or #4 sports book depending on the state. Short selling, unwarranted institutional wariness of share dilution and the general market focus on sports book instead of online casino has left $RSI grossly undervalued. A massive blow out at Q4 earnings will result in analyst upgrades and a rapid repricing by market makers and institutions seeking exposure to the emerging sector. **Overview** "Sports book is really just kind of a warm up in a lot of ways for an online casino where the real money is made" - Niccolo De Masi, CEO dMY technologies Rush Street Interactive ($RSI) operates the BetRivers.com online casino and sports book. They are now fully licensed and operating in New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Iowa, and Virginia. They own and operate a casino in New York and already have a New York license making them well positioned for liberalization there. They merged with a dMY Technology Group SPAC on Dec. 31st 2020 with 240 million on the balance sheet to spend on growth. The online casino business is fundamentally more profitable than sports betting because the average value of a casino player is estimated at $600 while a sports book player could be as little as $20. Estimates put the online casino market at DOUBLE the size of the online sports book market and the online casino industry is really just getting started as more states liberalize. $RSI is expert at new market entry; they have been first to market in Pennsylvania, Illinois, Indiana, and Colorado and even when they aren't first they are capable of capturing market share in competitive markets such as New Jersey. They also have products which women play which accounts for at least half of the market in online casino. The female market is one that the pure sports book plays miss out on. Also for some fucking reason they operate a casino and sports book in Colombia (rushbet.co) and may make large expansions into other parts of south America as legalization continues. This means they have the expertise necessary for global expansion in the future although the states remains their primary focus and growth driver. **The Financials and Strategy** Unlike other companies in the space Rush Street is already profitable in 2020 and has a strong focus on Return On Invested Capital (ROIC). Q3 gross revenue was $71.9 Million. Q4 revenue is going to be a blow out. Combing through state gambling revenue data and breaking that down by market share my estimate is that Q4 revenue could be as high as $120 Million. Paired with this blow out will be a **guidance raise to $500 Million for 2021**, which is 2/3 of DraftKings 2021 guidance of $750M. https://imgur.com/a/xkfcayC What is striking when compared to $DKNG is that their advertising spend was only a quarter of revenue in Q3 while $DKNG spent 155% of their revenue. This will change as they begin to focus on growth, but it shows they are very good at getting return on ad spend. This company should actually be valued close to $DKNG based on growth potential once guidance is raised. https://imgur.com/a/RQQXtGg Their focus on attracting **female gamers** is also important to their long term growth potential. The sports book plays with cross sells to casino such as $DKNG will not be able to grow through the female demographic in the same way. **This cannot be understated** as one of the major strategic advantages of $RSI. https://imgur.com/a/xzJj26n As I said before I expect their trend of rapid growth to continue for Q4 earnings, certainly going to be a blow out based on looking at state gambling revenue numbers. My estimate is that their revenue will be around 110M for Q4. I also expect guidance to be raised to 500M for 2021 due to strong performance in existing markets and the recently opened Michigan market as well as their sports book launch in Virginia. https://imgur.com/a/ckTqHhh **Short sellers have entered the chat** The short interest on $RSI sits at 5.08 M shares as of 01/14/21 representing a 30% increase. Now why would a company already valued at 2.8 Billion and with a comparative valuation of 8-10 Billion compared with $DKNG and $PENN be so heavily shorted at such a low market cap? My conclusion is that an institution with 10s of millions to throw at shorting this stock wants to take advantage of fear of share dilution from warrant calling or to establish a better entry prior to earnings. **Commander in GILF Cathie Wood is Bullish on the sector** On Feb. 2nd ARK disclosed that they had purchased 620,300 shares of $DKNG. This is extremely bullish for the sector. I am highly confident that after Q4 earnings ARK will be purchasing shares in $RSI as well due its strategic advantages relative to $DKNG and exposure to the female demographic. For such a small market cap company this will be a major catalyst. **Institutions are bullish** Fidelity has increased their holdings to 14% as of today: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/8f10b0d8-a3d2-447c-bc75-87587d0a4670.pdf Alliance Bernstein holds a 6% position reported today: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/e883778d-e759-4a85-91c1-3242ed110720.pdf **Final notes** Jerome "The Bus" Bettis, Steelers legend and hall of fame running back, is their brand ambassador... This company knows their target audience and how to appeal to them, likely more 'classic' ambassadors to come to attract even more boomer and Gen X degenerates. Keep in mind these are the gamblers with big money to spend, the average age of an online casino gambler is 42. This stock has been grossly underpriced due to short selling. The terms of the SPAC deal were not unfavorable and all the insiders held their shares through the merger banking on growth in the market - **management owns 77% of the company**. This is a true value play on a well managed company in an emerging industry with a market size in the hundreds of billions. I plan to hold shares long term. I will post a part 2 breaking down their latest S-1 filing and Q4 revenue by state when they release their Q4 earnings date. Do your own research. References: https://www.legalsportsreport.com/sports-betting/revenue/ https://fintel.io/doc/sec-rush-street-interactive-inc-ex991-2021-january-05-18632-947 https://s26.q4cdn.com/794539746/files/doc_presentations/2020/RSI-Investor-Presentation-15-Oct-2020.pdf https://ir.rushstreetinteractive.com/news/news-details/2020/RUSH-STREET-INTERACTIVE-ANNOUNCES-THIRD-QUARTER-2020-RESULTS-AND-RAISES-FULL-YEAR-GUIDANCE/default.aspx https://www.youtube.com/watch?v=SQWEhWuPmzU https://www.thestreet.com/investing/draftkings-surges-as-stake-bought-by-ark-next-generation Positions: $RSI 30 03/19 30C I will be adding 04/16 25cs each week until earnings. Exit strategy: "What's an exit strategy?" - u/deepfuckingvalue Update 021321: IMPORTANT after a commenter pointed out that technically they could report as late as April 2nd I AM RECOMMENDING THAT EVERYONE ROLL OUT TO APRIL 16TH 35Cs
The #1 online casino company $RSI is primed for ingress.
Positions: $RSI 03/19 30C Proof: https://imgur.com/a/swCCMjz This post is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice. TLDR: Rush Street Interactive ($RSI) is the #1 nationwide online casino company and the #3 or #4 sports book depending on the state. Short selling, unwarranted institutional wariness of share dilution and the general market focus on sports book instead of online casino has left $RSI grossly undervalued. A massive blow out at Q4 earnings will result in analyst upgrades and a rapid repricing by market makers and institutions seeking exposure to the emerging sector. Overview "Sports book is really just kind of a warm up in a lot of ways for an online casino where the real money is made" - Niccolo De Masi, CEO dMY technologies Rush Street Interactive ($RSI) operates the BetRivers.com online casino and sports book. They are now fully licensed and operating in New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Iowa, and Virginia. They own and operate a casino in New York and already have a New York license making them well positioned for liberalization there. They merged with a dMY Technology Group SPAC on Dec. 31st 2020 with 240 million on the balance sheet to spend on growth. The online casino business is fundamentally more profitable than sports betting because the average value of a casino player is estimated at $600 while a sports book player could be as little as $20. Estimates put the online casino market at DOUBLE the size of the online sports book market and the online casino industry is really just getting started as more states liberalize. $RSI is expert at new market entry; they have been first to market in Pennsylvania, Illinois, Indiana, and Colorado and even when they aren't first they are capable of capturing market share in competitive markets such as New Jersey. They also have products which women play which accounts for at least half of the market in online casino. The female market is one that the pure sports book plays miss out on. Also for some fucking reason they operate a casino and sports book in Colombia (rushbet.co) and may make large expansions into other parts of south America as legalization continues. This means they have the expertise necessary for global expansion in the future although the states remains their primary focus and growth driver. The Financials and Strategy Unlike other companies in the space Rush Street is already profitable in 2020 and has a strong focus on Return On Invested Capital (ROIC). Q3 gross revenue was $71.9 Million. Q4 revenue is going to be a blow out. Combing through state gambling revenue data and breaking that down by market share my estimate is that Q4 revenue could be as high as $120 Million. Paired with this blow out will be a **guidance raise to $500 Million for 2021**, which is 2/3 of DraftKings 2021 guidance of $750M. https://imgur.com/a/xkfcayC What is striking when compared to $DKNG is that their advertising spend was only a quarter of revenue in Q3 while $DKNG spent 155% of their revenue. This will change as they begin to focus on growth, but it shows they are very good at getting return on ad spend. This company should actually be valued close to $DKNG based on growth potential once guidance is raised. https://imgur.com/a/RQQXtGg Their focus on attracting **female gamers** is also important to their long term growth potential. The sports book plays with cross sells to casino such as $DKNG will not be able to grow through the female demographic in the same way. **This cannot be understated** as one of the major strategic advantages of $RSI. https://imgur.com/a/xzJj26n As I said before I expect their trend of rapid growth to continue for Q4 earnings, certainly going to be a blow out based on looking at state gambling revenue numbers. My estimate is that their revenue will be around 110M for Q4. I also expect guidance to be raised to 500M for 2021 due to strong performance in existing markets and the recently opened Michigan market as well as their sports book launch in Virginia. https://imgur.com/a/ckTqHhh Short sellers have entered the chat The short interest on $RSI sits at 5.08 M shares as of 01/14/21 representing a 30% increase. Now why would a company already valued at 2.8 Billion and with a comparative valuation of 8-10 Billion compared with $DKNG and $PENN be so heavily shorted at such a low market cap? My conclusion is that an institution with 10s of millions to throw at shorting this stock wants to take advantage of fear of share dilution from warrant calling or to establish a better entry prior to earnings. Cathie Wood is Bullish on the sector On Feb. 2nd ARK disclosed that they had purchased 620,300 shares of $DKNG. This is extremely bullish for the sector. I am highly confident that after Q4 earnings ARK will be purchasing shares in $RSI as well due its strategic advantages relative to $DKNG and exposure to the female demographic. For such a small market cap company this will be a major catalyst. Final notes Jerome "The Bus" Bettis, Steelers legend and hall of fame running back, is their brand ambassador... This company knows their target audience and how to appeal to them, likely more 'classic' ambassadors to come to attract even more boomer and Gen X degenerates. Keep in mind these are the gamblers with big money to spend, the average age of an online casino gambler is 42. This stock has been grossly underpriced due to short selling. The terms of the SPAC deal were not unfavorable and all the insiders held their shares through the merger banking on growth in the market - **management owns 77% of the company**. This is a true value play on a well managed company in an emerging industry with a market size in the hundreds of billions. I plan to hold shares long term. I will post a part 2 breaking down their latest S-1 filing and Q4 revenue by state when they release their Q4 earnings date. Do your own research. References: https://www.legalsportsreport.com/sports-betting/revenue/ https://fintel.io/doc/sec-rush-street-interactive-inc-ex991-2021-january-05-18632-947 https://s26.q4cdn.com/794539746/files/doc_presentations/2020/RSI-Investor-Presentation-15-Oct-2020.pdf https://ir.rushstreetinteractive.com/news/news-details/2020/RUSH-STREET-INTERACTIVE-ANNOUNCES-THIRD-QUARTER-2020-RESULTS-AND-RAISES-FULL-YEAR-GUIDANCE/default.aspx https://www.youtube.com/watch?v=SQWEhWuPmzU https://www.thestreet.com/investing/draftkings-surges-as-stake-bought-by-ark-next-generation Positions: $RSI 03/19 30C I will be adding 04/16 25Cs each week until earnings Exit strategy: "What's an exit strategy?" - u/deepfuckingvalue Forgot to add: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/8f10b0d8-a3d2-447c-bc75-87587d0a4670.pdf Fidelity just doubled their position to almost 15% Update 021221: Everyone that went in on my initial entry is down 40% right now. As I said I plan to continue to buy 03/19 25Cs each week until earnings. If you’re worried about further losses wait until the day before earnings to load up, you may miss a run up though. Update 021321: IMPORTANT after a commenter pointed out that technically they could report as late as April 2nd I AM RECOMMENDING THAT EVERYONE ROLL OUT TO APRIL 16TH 35Cs
Playboy going public: Porn, Gambling, and Cannabis
NEW INFO 5 Results from share redemption are posted. Less than .2% redeemed. Very bullish as investors are showing extreme confidence in the future of PLBY. https://finance.yahoo.com/news/playboy-mountain-crest-acquisition-corp-120000721.html NEW INFO 4 Definitive Agreement to purchase 100% of Lovers brand stores announced 2/1. https://www.streetinsider.com/Corporate+News/Playboy+%28MCAC%29+Confirms+Deal+to+Acquire+Lovers/17892359.html NEW INFO 3 I bought more on the dip today. 5081 total. Price rose AH to $12.38 (2.15%) NEW INFO 2 Here is the full webinar. https://icrinc.zoom.us/rec/play/9GWKdmOYumjWfZuufW3QXpe_FW_g--qeNbg6PnTjTMbnNTgLmCbWjeRFpQga1iPc-elpGap8dnDv8Zww.yD7DjUwuPmapeEdP?continueMode=true&tk=lEYc4F_FkKlgsmCIs6w0gtGHT2kbgVGbUju3cIRBSjk.DQIAAAAV8NK49xZWdldRM2xNSFNQcTBmcE00UzM3bXh3AAAAAAAAAAAAAAAAAAAAAAAAAAAA&uuid=WN_GKWqbHkeSyuWetJmLFkj4g&_x_zm_rtaid=kR45-uuqRE-L65AxLjpbQw.1611967079119.2c054e3d3f8d8e63339273d9175939ed&_x_zm_rhtaid=866 NEW INFO 1 Live merger webinar with PLBY and MCAC on Friday January 29, 2021 at 12:00 NOON EST link below https://mcacquisition.com/investor-relations/press-release-details/2021/Playboy-Enterprises-Inc.-and-Mountain-Crest-Acquisition-Corp-Participate-in-SPACInsider-ICR-Webinar-on-January-29th-at-12pm-ET/default.aspx Playboy going public: Porn, Gambling, and Cannabis !!!WARNING READING AHEAD!!! TL;DR at the end. It will take some time to sort through all the links and read/watch everything, but you should. In the next couple weeks, Mountain Crest Acquisition Corp is taking Playboy public. The existing ticker MCAC will become PLBY. Special purpose acquisition companies have taken private companies public in recent months with great success. I believe this will be no exception. Notably, Playboy is profitable and has skyrocketing revenue going into a transformational growth phase. Porn - First and foremost, let's talk about porn. I know what you guys are thinking. “Porno mags are dead. Why would I want to invest in something like that? I can get porn for free online.” Guess what? You are absolutely right. And that’s exactly why Playboy doesn’t do that anymore. That’s right, they eliminated their print division. And yet they somehow STILL make money from porn that people (see: boomers) pay for on their website through PlayboyTV, Playboy Plus, and iPlayboy. Here’s the thing: Playboy has international, multi-generational name recognition from porn. They have content available in 180 countries. It will be the only publicly traded adult entertainment (porn) company. But that is not where this company is going. It will help support them along the way. You can see every Playboy magazine through iPlayboy if you’re interested. NSFW links below: https://www.playboy.com/ https://www.playboytv.com/ https://www.playboyplus.com/ https://www.iplayboy.com/ Gambling - Some of you might recognize the Playboy brand from gambling trips to places like Las Vegas, Atlantic City, Cancun, London or Macau. They’ve been in the gambling biz for decades through their casinos, clubs, and licensed gaming products. They see the writing on the wall. COVID is accelerating the transition to digital, application based GAMBLING. That’s right. What we are doing on Robinhood with risky options is gambling, and the only reason regulators might give a shit anymore is because we are making too much money. There may be some restrictions put in place, but gambling from your phone on your couch is not going anywhere. More and more states are allowing things like Draftkings, poker, state ‘lottery” apps, hell - even political betting. Michigan and Virginia just ok’d gambling apps. They won’t be the last. This is all from your couch and any 18 year old with a cracked iphone can access it. Wouldn’t it be cool if Playboy was going to do something like that? They’re already working on it. As per CEO Ben Kohn who we will get to later, “...the company’s casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth.” Honestly, I stopped researching Scientific Games' sports betting segment when I saw the word ‘omni-channel’. That told me all I needed to know about it’s success. “Our SG Sports™ platform is an enhanced, omni-channel solution for online, self-service and retail fixed odds sports betting – from soccer to tennis, basketball, football, baseball, hockey, motor sports, racing and more.” https://www.scientificgames.com/ https://www.microgaming.co.uk/ “This latter segment has become increasingly enticing for Playboy, and it said last week that it is considering new tie-ups that could include gaming operators like PointsBet and 888Holdings.” https://calvinayre.com/2020/10/05/business/playboys-gaming-ops-could-get-a-boost-from-spac-purchase/ As per their SEC filing: “Significant consumer engagement and spend with Playboy-branded gaming properties around the world, including with leading partners such as Microgaming, Scientific Games, and Caesar’s Entertainment, steers our investment in digital gaming, sports betting and other digital offerings to further support our commercial strategy to expand consumer spend with minimal marginal cost, and gain consumer data to inform go-to-market plans across categories.” https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tMDAA1 They are expanding into more areas of gaming/gambling, working with international players in the digital gaming/gambling arena, and a Playboy sportsbook is on the horizon. https://www.playboy.com/read/the-pleasure-of-playing-with-yourself-mobile-gaming-in-the-covid-era Cannabis - If you’ve ever read through a Playboy magazine, you know they’ve had a positive relationship with cannabis for many years. As of September 2020, Playboy has made a major shift into the cannabis space. Too good to be true you say? Check their website. Playboy currently sells a range of CBD products. This is a good sign. Federal hemp products, which these most likely are, can be mailed across state lines and most importantly for a company like Playboy, can operate through a traditional banking institution. CBD products are usually the first step towards the cannabis space for large companies. Playboy didn’t make these products themselves meaning they are working with a processor in the cannabis industry. Another good sign for future expansion. What else do they have for sale? Pipes, grinders, ashtrays, rolling trays, joint holders. Hmm. Ok. So it looks like they want to sell some shit. They probably don’t have an active interest in cannabis right? Think again: https://www.forbes.com/sites/javierhasse/2020/09/24/playboy-gets-serious-about-cannabis-law-reform-advocacy-with-new-partnership-grants/?sh=62f044a65cea “Taking yet another step into the cannabis space, Playboy will be announcing later on Thursday (September, 2020) that it is launching a cannabis law reform and advocacy campaign in partnership with National Organization for the Reform of Marijuana Laws (NORML), Last Prisoner Project, Marijuana Policy Project, the Veterans Cannabis Project, and the Eaze Momentum Program.” “According to information procured exclusively, the three-pronged campaign will focus on calling for federal legalization. The program also includes the creation of a mentorship plan, through which the Playboy Foundation will support entrepreneurs from groups that are underrepresented in the industry.” Remember that CEO Kohn from earlier? He wrote this recently: https://medium.com/naked-open-letters-from-playboy/congress-must-pass-the-more-act-c867c35239ae Seems like he really wants weed to be legal? Hmm wonder why? The writing's on the wall my friends. Playboy wants into the cannabis industry, they are making steps towards this end, and we have favorable conditions for legislative progress. Don’t think branding your own cannabis line is profitable or worthwhile? Tell me why these 41 celebrity millionaires and billionaires are dummies. I’ll wait. https://www.celebstoner.com/news/celebstoner-news/2019/07/12/top-celebrity-cannabis-brands/ Confirmation: I hear you. “This all seems pretty speculative. It would be wildly profitable if they pull this shift off. But how do we really know?” Watch this whole video: https://finance.yahoo.com/video/playboy-ceo-telling-story-female-154907068.html Man - this interview just gets my juices flowing. And highlights one of my favorite reasons for this play. They have so many different business avenues from which a catalyst could appear. I think paying attention, holding shares, and options on these staggered announcements over the next year is the way I am going to go about it. "There's definitely been a shift to direct-to-consumer," he (Kohn) said. "About 50 percent of our revenue today is direct-to-consumer, and that will continue to grow going forward.” “Kohn touted Playboy's portfolio of both digital and consumer products, with casino-style gaming, in particular, serving a crucial role under the company's new business model. Playboy also has its sights on the emerging cannabis market, from CBD products to marijuana products geared toward sexual health and pleasure.” "If THC does become legal in the United States, we have developed certain strains to enhance your sex life that we will launch," Kohn said. https://cheddar.com/media/playboy-goes-public-health-gaming-lifestyle-focus Oh? The CEO actually said it? Ok then. “We have developed certain strains…” They’re already working with growers on strains and genetics? Ok. There are several legal cannabis markets for those products right now, international and stateside. I expect Playboy licensed hemp and THC pre-rolls by EOY. Something like this: https://www.etsy.com/listing/842996758/10-playboy-pre-roll-tubes-limited?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=pre+roll+playboy&ref=sr_gallery-1-2&organic_search_click=1 Maintaining cannabis operations can be costly and a regulatory headache. Playboy’s licensing strategy allows them to pick successful, established partners and sidestep traditional barriers to entry. You know what I like about these new markets? They’re expanding. Worldwide. And they are going to be a bigger deal than they already are with or without Playboy. Who thinks weed and gambling are going away? Too many people like that stuff. These are easy markets. And Playboy is early enough to carve out their spot in each. Fuck it, read this too: https://www.forbes.com/sites/jimosman/2020/10/20/playboy-could-be-the-king-of-spacs-here-are-three-picks/?sh=2e13dcaa3e05 Numbers: You want numbers? I got numbers. As per the company’s most recent SEC filing: “For the year ended December 31, 2019, and the nine months ended September 30, 2020, Playboy’s historical consolidated revenue was $78.1 million and $101.3 million, respectively, historical consolidated net income (loss) was $(23.6) million and $(4.8) million, respectively, and Adjusted EBITDA was $13.1 million and $21.8 million, respectively.” “In the nine months ended September 30, 2020, Playboy’s Licensing segment contributed $44.2 million in revenue and $31.1 million in net income.” “In the ninth months ended September 30, 2020, Playboy’s Direct-to-Consumer segment contributed $40.2 million in revenue and net income of $0.1 million.” “In the nine months ended September 30, 2020, Playboy’s Digital Subscriptions and Content segment contributed $15.4 million in revenue and net income of $7.4 million.” They are profitable across all three of their current business segments. “Playboy’s return to the public markets presents a transformed, streamlined and high-growth business. The Company has over $400 million in cash flows contracted through 2029, sexual wellness products available for sale online and in over 10,000 major retail stores in the US, and a growing variety of clothing and branded lifestyle and digital gaming products.” https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF Growth: Playboy has massive growth in China and massive growth potential in India. “In China, where Playboy has spent more than 25 years building its business, our licensees have an enormous footprint of nearly 2,500 brick and mortar stores and 1,000 ecommerce stores selling high quality, Playboy-branded men’s casual wear, shoes/footwear, sleepwear, swimwear, formal suits, leather & non-leather goods, sweaters, active wear, and accessories. We have achieved significant growth in China licensing revenues over the past several years in partnership with strong licensees and high-quality manufacturers, and we are planning for increased growth through updates to our men’s fashion lines and expansion into adjacent categories in men’s skincare and grooming, sexual wellness, and women’s fashion, a category where recent launches have been well received.” The men’s market in China is about the same size as the entire population of the United States and European Union combined. Playboy is a leading brand in this market. They are expanding into the women’s market too. Did you know CBD toothpaste is huge in China? China loves CBD products and has hemp fields that dwarf those in the US. If Playboy expands their CBD line China it will be huge. Did you know the gambling money in Macau absolutely puts Las Vegas to shame? Technically, it's illegal on the mainland, but in reality, there is a lot of gambling going on in China. https://www.forbes.com/sites/javierhasse/2020/10/19/magic-johnson-and-uncle-buds-cbd-brand-enter-china-via-tmall-partnership/?sh=271776ca411e “In India, Playboy today has a presence through select apparel licensees and hospitality establishments. Consumer research suggests significant growth opportunities in the territory with Playboy’s brand and categories of focus.” “Playboy Enterprises has announced the expansion of its global consumer products business into India as part of a partnership with Jay Jay Iconic Brands, a leading fashion and lifestyle Company in India.” “The Indian market today is dominated by consumers under the age of 35, who represent more than 65 percent of the country’s total population and are driving India’s significant online shopping growth. The Playboy brand’s core values of playfulness and exploration resonate strongly with the expressed desires of today’s younger millennial consumers. For us, Playboy was the perfect fit.” “The Playboy international portfolio has been flourishing for more than 25 years in several South Asian markets such as China and Japan. In particular, it has strategically targeted the millennial and gen-Z audiences across categories such as apparel, footwear, home textiles, eyewear and watches.” https://www.licenseglobal.com/industry-news/playboy-expands-global-footprint-india It looks like they gave COVID the heisman in terms of net damage sustained: “Although Playboy has not suffered any material adverse consequences to date from the COVID-19 pandemic, the business has been impacted both negatively and positively. The remote working and stay-at-home orders resulted in the closure of the London Playboy Club and retail stores of Playboy’s licensees, decreasing licensing revenues in the second quarter, as well as causing supply chain disruption and less efficient product development thereby slowing the launch of new products. However, these negative impacts were offset by an increase in Yandy’s direct-to-consumer sales, which have benefited in part from overall increases in online retail sales so far during the pandemic.” Looks like the positives are long term (Yandy acquisition) and the negatives are temporary (stay-at-home orders). https://www.sec.gov/Archives/edgadata/1803914/000110465921006093/tm213766-1_defa14a.htm This speaks to their ability to maintain a financially solvent company throughout the transition phase to the aforementioned areas. They’d say some fancy shit like “expanded business model to encompass four key revenue streams: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.” I hear “we’re just biding our time with these trinkets until those dollar dollar bill y’all markets are fully up and running.” But the truth is these existing revenue streams are profitable, scalable, and rapidly expanding Playboy’s e-commerce segment around the world. "Even in the face of COVID this year, we've been able to grow EBITDA over 100 percent and revenue over 68 percent, and I expect that to accelerate going into 2021," he said. “Playboy is accelerating its growth in company-owned and branded consumer products in attractive and expanding markets in which it has a proven history of brand affinity and consumer spend.” Also in the SEC filing, the Time Frame: “As we detailed in the definitive proxy statement, the SPAC stockholder meeting to vote on the transaction has been set for February 9th, and, subject to stockholder approval and satisfaction of the other closing conditions, we expect to complete the merger and begin trading on NASDAQ under ticker PLBY shortly thereafter,” concluded Kohn. The Players: Suhail “The Whale” Rizvi (HMFIC), Ben “The Bridge” Kohn (CEO), “lil” Suying Liu & “Big” Dong Liu (Young-gun China gang). I encourage you to look these folks up. The real OG here is Suhail Rizvi. He’s from India originally and Chairman of the Board for the new PLBY company. He was an early investor in Twitter, Square, Facebook and others. His firm, Rizvi Traverse, currently invests in Instacart, Pinterest, Snapchat, Playboy, and SpaceX. Maybe you’ve heard of them. “Rizvi, who owns a sprawling three-home compound in Greenwich, Connecticut, and a 1.65-acre estate in Palm Beach, Florida, near Bill Gates and Michael Bloomberg, moved to Iowa Falls when he was five. His father was a professor of psychology at Iowa. Along with his older brother Ashraf, a hedge fund manager, Rizvi graduated from Wharton business school.” “Suhail Rizvi: the 47-year-old 'unsocial' social media baron: When Twitter goes public in the coming weeks (2013), one of the biggest winners will be a 47-year-old financier who guards his secrecy so zealously that he employs a person to take down his Wikipedia entry and scrub his photos from the internet. In IPO, Twitter seeks to be 'anti-FB'” “Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon. But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi. Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday (November, 2013). Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.” https://www.nytimes.com/2013/11/08/technology/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday.html Y’all like that Arab money? How about a dude that can call up Saudi Princes and convince them to spend? Funniest shit about I read about him: “Rizvi was able to buy only $100 million in Facebook shortly before its IPO, thus limiting his returns, according to people with knowledge of the matter.” Poor guy :( He should be fine with the 16 million PLBY shares he's going to have though :) Shuhail also has experience in the entertainment industry. He’s invested in companies like SESAC, ICM, and Summit Entertainment. He’s got Hollywood connections to blast this stuff post-merger. And he’s at least partially responsible for that whole Twilight thing. I’m team Edward btw. I really like what Suhail has done so far. He’s lurked in the shadows while Kohn is consolidating the company, trimming the fat, making Playboy profitable, and aiming the ship at modern growing markets. https://www.reuters.com/article/us-twitter-ipo-rizvi-insight/insight-little-known-hollywood-investor-poised-to-score-with-twitter-ipo-idUSBRE9920VW20131003 Ben “The Bridge” Kohn is an interesting guy. He’s the connection between Rizvi Traverse and Playboy. He’s both CEO of Playboy and was previously Managing Partner at Rizvi Traverse. Ben seems to be the voice of the Playboy-Rizvi partnership, which makes sense with Suhail’s privacy concerns. Kohn said this: “Today is a very big day for all of us at Playboy and for all our partners globally. I stepped into the CEO role at Playboy in 2017 because I saw the biggest opportunity of my career. Playboy is a brand and platform that could not be replicated today. It has massive global reach, with more than $3B of global consumer spend and products sold in over 180 countries. Our mission – to create a culture where all people can pursue pleasure – is rooted in our 67-year history and creates a clear focus for our business and role we play in people’s lives, providing them with the products, services and experiences that create a lifestyle of pleasure. We are taking this step into the public markets because the committed capital will enable us to accelerate our product development and go-to-market strategies and to more rapidly build our direct to consumer capabilities,” said Ben Kohn, CEO of Playboy. “Playboy today is a highly profitable commerce business with a total addressable market projected in the trillions of dollars,” Mr. Kohn continued, “We are actively selling into the Sexual Wellness consumer category, projected to be approximately $400 billion in size by 2024, where our recently launched intimacy products have rolled out to more than 10,000 stores at major US retailers in the United States. Combined with our owned & operated ecommerce Sexual Wellness initiatives, the category will contribute more than 40% of our revenue this year. In our Apparel and Beauty categories, our collaborations with high-end fashion brands including Missguided and PacSun are projected to achieve over $50M in retail sales across the US and UK this year, our leading men’s apparel lines in China expanded to nearly 2500 brick and mortar stores and almost 1000 digital stores, and our new men’s and women’s fragrance line recently launched in Europe. In Gaming, our casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth. Our product strategy is informed by years of consumer data as we actively expand from a purely licensing model into owning and operating key high-growth product lines focused on driving profitability and consumer lifetime value. We are thrilled about the future of Playboy. Our foundation has been set to drive further growth and margin, and with the committed capital from this transaction and our more than $180M in NOLs, we will take advantage of the opportunity in front of us, building to our goal of $100M of adjusted EBITDA in 2025.” https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company Also, according to their Form 4s, “Big” Dong Liu and “lil” Suying Liu just loaded up with shares last week. These guys are brothers and seem like the Chinese market connection. They are only 32 & 35 years old. I don’t even know what that means, but it's provocative. https://www.secform4.com/insider-trading/1832415.htm https://finance.yahoo.com/news/mountain-crest-acquisition-corp-ii-002600994.html Y’all like that China money? “Mr. Liu has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.” Dr. Suying Liu, Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp., commented, “Playboy is a unique and compelling investment opportunity, with one of the world’s largest and most recognized brands, its proven consumer affinity and spend, and its enormous future growth potential in its four product segments and new and existing geographic regions. I am thrilled to be partnering with Ben and his exceptional team to bring his vision to fruition.” https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company These guys are good. They have a proven track record of success across multiple industries. Connections and money run deep with all of these guys. I don’t think they’re in the game to lose. I was going to write a couple more paragraphs about why you should have a look at this but really the best thing you can do is read this SEC filing from a couple days ago. It explains the situation in far better detail. Specifically, look to page 137 and read through their strategy. Also, look at their ownership percentages and compensation plans including the stock options and their prices. The financials look great, revenue is up 90% Q3, and it looks like a bright future. https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF I’m hesitant to attach this because his position seems short term, but I’m going to with a warning because he does hit on some good points (two are below his link) and he’s got a sizable position in this thing (500k+ on margin, I think). I don’t know this guy but he did look at the same publicly available info and make roughly the same prediction, albeit without the in depth gambling or cannabis mention. You can also search reddit for ‘MCAC’ and very few relevant results come up and none of them even come close to really looking at this thing. https://docs.google.com/document/d/1gOvAd6lebs452hFlWWbxVjQ3VMsjGBkbJeXRwDwIJfM/edit?usp=sharing “Also, before you people start making claims that Playboy is a “boomer” company, STOP RIGHT THERE. This is not a good argument. Simply put. The only thing that matters is Playboy’s name recognition, not their archaic business model which doesn’t even exist anymore as they have completely repurposed their business.” “Imagine not buying $MCAC at a 400M valuation lol. Streetwear department is worth 1B alone imo.” Considering the ridiculous Chinese growth as a lifestyle brand, he’s not wrong. Current Cultural Significance and Meme Value: A year ago I wouldn’t have included this section but the events from the last several weeks (even going back to tsla) have proven that a company’s ability to meme and/or gain social network popularity can have an effect. Tik-tok, Snapchat, Twitch, Reddit, Youtube, Facebook, Twitter. They all have Playboy stuff on them. Kids in middle and highschool know what Playboy is but will likely never see or touch one of the magazines in person. They’ll have a Playboy hoodie though. Crazy huh? A lot like GME, PLBY would hugely benefit from meme-value stock interest to drive engagement towards their new business model while also building strategic coffers. This interest may not directly and/or significantly move the stock price but can generate significant interest from larger players who will. Bull Case: The year is 2025. Playboy is now the world leader pleasure brand. They began by offering Playboy licensed gaming products, including gambling products, direct to consumers through existing names. By 2022, demand has skyrocketed and Playboy has designed and released their own gambling platforms. In 2025, they are also a leading cannabis brand in the United States and Canada with proprietary strains and products geared towards sexual wellness. Cannabis was legalized in the US in 2023 when President Biden got glaucoma but had success with cannabis treatment. He personally pushes for cannabis legalization as he steps out of office after his first term. Playboy has also grown their brand in China and India to multi-billion per year markets. The stock goes up from 11ish to 100ish and everyone makes big gains buying somewhere along the way. Bear Case: The United States does a complete 180 on marijuana and gambling. President Biden overdoses on marijuana in the Lincoln bedroom when his FDs go tits up and he loses a ton of money in his sports book app after the Fighting Blue Hens narrowly lose the National Championship to Bama. Playboy is unable to expand their cannabis and gambling brands but still does well with their worldwide lifestyle brand. They gain and lose some interest in China and India but the markets are too large to ignore them completely. The stock goes up from 11ish to 13ish and everyone makes 15-20% gains. TL;DR: Successful technology/e-commerce investment firm took over Playboy to turn it into a porn, online gambling/gaming, sports book, cannabis company, worldwide lifestyle brand that promotes sexual wellness, vetern access, women-ownership, minority-ownership, and “pleasure for all”. Does a successful online team reinventing an antiquated physical copy giant sound familiar? No options yet, shares only for now. $11.38 per share at time of writing. My guess? $20 by the end of February. $50 by EOY. This is not financial advice. I am not qualified to give financial advice. I’m just sayin’ I would personally use a Playboy sports book app while smoking a Playboy strain specific joint and it would be cool if they did that. Do your own research. You’d probably want to start here: WARNING - POTENTIALLY NSFW - SEXY MODELS AHEAD - no actual nudity though https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Craig-Hallum-Conference-Investor-Presentation-11_17_20-compressed.pdf Or here: https://www.mcacquisition.com/investor-relations/default.aspx Jimmy Chill: “Get into any SPAC at $10 or $11 and you are going to make money.” STL;DR: Buy MCAC. MCAC > PLBY couple weeks. Rocketship. Moon. Position: 5000 shares. I will buy short, medium, and long-dated calls once available.
Chewy crushes earnings reports, while GameStop disappoints. What is the latest news on Apple and the new AirPods Max? Should we buy AirBNB or DoorDash when they launch tomorrow? Let’s talk about this and more about the stock market Hey everyone and Good Morning! So, let’s start with the recap of yesterday as we saw the Nasdaq Composite leading the way up half a percent, the SP500 up .28%, both of them closing at new record highs with the Dow Jones also up .35% to close Tuesday. The VIX also showed a steady decline through the day as it dropped almost 3%. This moves in the market were caused by the latest hopes for a stimulus deal to be agreed on by the end of current session in congress as there seems to be a lot of ground on which parties can agree on. Things have gotten worse in the economy since this hole stimulus talk has been going around, so, if both parties would have been more willing to give up some ground, people would have already gotten more support and we would probably be talking about other bills or measures that would have helped even more. So, maybe this latest Mnuchin proposal with maybe minor tweaks would be the best chance of anything happening by the end of this year. We saw more companies advancing yesterday as over 3 thousand companies were moving up, continuing the huge bull run started in November as more than 84% of companies are moving above the 50 and 200-day moving averages. The best gaining sectors yesterday were Energy and Health Care while Real Estate and Utilities lagged behind as Large-Cap Growth companies were the only company factor analysis that lost ground yesterday, with small-caps, especially small-cap growth companies largely outperforming the markets. You can see in this HEAT MAP that there were gains to be made yesterday in a lot of parts of the stock market, with only a few big red spots on the map. Today we will get some numbers on the November Job openings, MBA mortgage applications and Petroleum inventories. While we got some earnings yesterday from Chewy which dazzled again in earnings with the only small miss coming in net sales per customer, but as the number of customers keeps increasing, this might continue to go down, as not every pet owner spends the same amount of big money on pets. The company reported an EBITDA of $5.5M vs a loss of over $9M expected with the gross margin increasing to over 25% while also giving great guidance for Q4 of $1.94B to $1.96B vs less than $1.8B expected by analysts. The company also turned around to a positive cash flow of over $30M. I really like this company and I expected it to be a good own at least for the next quarter until they reach more hard earnings comps next year. Meanwhile, as I expected GameStop had another bad quarter despite beating some earnings estimates with a smaller loss than expected, the revenue still continued to drop over 30% on a year over year basis while comps where even worse missing the expectations by quite a margin. Though e-commerce sales rose by more than 250% in Q3, this did not offset the comparable store sales. Margins also declined with hardware margins being the biggest reasons why. I think this company has a very though challenge on its hands with e-commerce being such a though place to compete in, I think the shift to online has been delayed for this company and I think it will struggle to survive, even though it might see a boost next quarter from the sales of the new gaming consoles that were released last month from both Sony and Microsoft. GME EARNINGS HIGHLIGHTS I wouldn’t touch this stock as I think there are far better plays out there than betting on this struggling company. The only company that I am interested today which will release earnings results is ADOBE which is expected to have the best results ever for the company with an increase of over 12% in both EPS and Revenues. Last go around despite posting great results, the stock fell more than 4% in September and have just recovered to that price point. I expect it this time to go higher and stay that way if they manage to deliver the best quarter on the books. Meanwhile DoorDash is pricing its initial public offering at over 100$/share which I believe is ridiculous, and it is an flat out joke of a valuation, this company has benefited a ton from this economy and still, this valuation implies that they will have over 50% of the total addressable market not in the US, but in the WORLD in the next couple of years, I don’t think this is a good investment opportunity, they will have increasing competition that offer the same thing for free or cheaper, this is a very though business to try and take over as one single company. People will also be way more likely to start going to restaurants maybe not in 2021 but for sure starting 2022 or whenever the vaccines are widely available in the entire world. I wouldn’t touch this stock at such high valuations, especially over 110$, even if I was looking for short-term gains which might end up being the case, I think there are better opportunities out there. In contrast to DoorDash, I might be interested to buy some AirBNB if the price is right after the IPO, I think it will have a much better future, as personally I really like to rent out apartments or homes whenever I go on a vacation rather than a traditional hotel. And even though it might have a tough Q4 and Q1 next year, I expect by Q2 next year more people will be vaccinated, so more people will start and go out and travel, and with especially low comps for next year as bookings are way down in 2020 this might make the company look much more attractive by this time next year. So, between DoorDash and AirBNB, I clearly like AirBNB a whole damn lot more. In other IPO news, RBNHD is expected to go public as soon as Q1 next year as they seek a valuation of over $20B. Some other Boeing came for companies like Boeing which made its first 737 MAX delivery since the ban ended, as it is expected to start rolling out deliveries and upgrades for current planes at a very good rate with more good news coming from the UK which will suspend the tariffs imposed on US Goods. While PENN gaming ran to an all-time high yesterday after news that sports betting may be launched in Michigan as early as six weeks from now, as legalization of gambling is moving faster and faster in the US, this also bolds well for DraftKings and other gambling stocks. Also, ETSY keeps getting upgrades from analysts as they are expected to have a great Q4 suggested from the most recent November sales data. And finally let’s talk about Apple, as they just revealed the new AirPods Max headphone yesterday, with a huge price tag of 549$, this seemed to gain a pretty bad reaction from consumers as they complained about the huge price tag with competitors like Bose and others selling similar headphones for 350$ or less. These headphones, also have a bigger price tag than even the new PS5 videogame console so we will have to wait and see if this is a successful product from Apple, I think they have gone a little overboard with the price, but rich people do tend to pay a premium for brand names. This can also be seen in the latest analyst call from JPMorgan as customers appear to favor high end models as delivery times have been increasing for the 12 Pro and 12 PRO MAX. On the better side of things for Apple, the Fitness+ service is expected to launch on the 14th of December and it will cost $9.99/month or $79.99$/year. I expect this to be a better success for the company and to drive an even more stable increase of revenues, as subscription-based revenues are better than one-time sales. So, I still like this company the most in the long-term and it might see a spike in the near future, especially moving closer to Q4 results and earnings. Apple is still the biggest position in my portfolio and I am not planning on changing that anytime soon. Good luck to everyone in the stock market as the futures are mixed while writing this post with the DOW and SP500 gaining ground while the Nasdaq futures are just down for the moment. Thank you everyone for reading! Hope you enjoyed the content! Be sure to leave a comment down below with your opinion on the stock market! Have a great day and see you next time!
Chewy crushes earnings reports, while GameStop disappoints. What is the latest news on Apple and the new AirPods Max? Should we buy AirBNB or DoorDash when they launch tomorrow? Let’s talk about this and more about the stock market Hey everyone and Good Morning! So, let’s start with the recap of yesterday as we saw the Nasdaq Composite leading the way up half a percent, the SP500 up .28%, both of them closing at new record highs with the Dow Jones also up .35% to close Tuesday. The VIX also showed a steady decline through the day as it dropped almost 3%. This moves in the market were caused by the latest hopes for a stimulus deal to be agreed on by the end of current session in congress as there seems to be a lot of ground on which parties can agree on. Things have gotten worse in the economy since this hole stimulus talk has been going around, so, if both parties would have been more willing to give up some ground, people would have already gotten more support and we would probably be talking about other bills or measures that would have helped even more. So, maybe this latest Mnuchin proposal with maybe minor tweaks would be the best chance of anything happening by the end of this year. We saw more companies advancing yesterday as over 3 thousand companies were moving up, continuing the huge bull run started in November as more than 84% of companies are moving above the 50 and 200-day moving averages. The best gaining sectors yesterday were Energy and Health Care while Real Estate and Utilities lagged behind as Large-Cap Growth companies were the only company factor analysis that lost ground yesterday, with small-caps, especially small-cap growth companies largely outperforming the markets. You can see in this HEAT MAP that there were gains to be made yesterday in a lot of parts of the stock market, with only a few big red spots on the map. Today we will get some numbers on the November Job openings, MBA mortgage applications and Petroleum inventories. While we got some earnings yesterday from Chewy which dazzled again in earnings with the only small miss coming in net sales per customer, but as the number of customers keeps increasing, this might continue to go down, as not every pet owner spends the same amount of big money on pets. The company reported an EBITDA of $5.5M vs a loss of over $9M expected with the gross margin increasing to over 25% while also giving great guidance for Q4 of $1.94B to $1.96B vs less than $1.8B expected by analysts. The company also turned around to a positive cash flow of over $30M. I really like this company and I expected it to be a good own at least for the next quarter until they reach more hard earnings comps next year. Meanwhile, as I expected GameStop had another bad quarter despite beating some earnings estimates with a smaller loss than expected, the revenue still continued to drop over 30% on a year over year basis while comps where even worse missing the expectations by quite a margin. Though e-commerce sales rose by more than 250% in Q3, this did not offset the comparable store sales. Margins also declined with hardware margins being the biggest reasons why. I think this company has a very though challenge on its hands with e-commerce being such a though place to compete in, I think the shift to online has been delayed for this company and I think it will struggle to survive, even though it might see a boost next quarter from the sales of the new gaming consoles that were released last month from both Sony and Microsoft. GME EARNINGS HIGHLIGHTS I wouldn’t touch this stock as I think there are far better plays out there than betting on this struggling company. The only company that I am interested today which will release earnings results is ADOBE which is expected to have the best results ever for the company with an increase of over 12% in both EPS and Revenues. Last go around despite posting great results, the stock fell more than 4% in September and have just recovered to that price point. I expect it this time to go higher and stay that way if they manage to deliver the best quarter on the books. Meanwhile DoorDash is pricing its initial public offering at over 100$/share which I believe is ridiculous, and it is an flat out joke of a valuation, this company has benefited a ton from this economy and still, this valuation implies that they will have over 50% of the total addressable market not in the US, but in the WORLD in the next couple of years, I don’t think this is a good investment opportunity, they will have increasing competition that offer the same thing for free or cheaper, this is a very though business to try and take over as one single company. People will also be way more likely to start going to restaurants maybe not in 2021 but for sure starting 2022 or whenever the vaccines are widely available in the entire world. I wouldn’t touch this stock at such high valuations, especially over 110$, even if I was looking for short-term gains which might end up being the case, I think there are better opportunities out there. In contrast to DoorDash, I might be interested to buy some AirBNB if the price is right after the IPO, I think it will have a much better future, as personally I really like to rent out apartments or homes whenever I go on a vacation rather than a traditional hotel. And even though it might have a tough Q4 and Q1 next year, I expect by Q2 next year more people will be vaccinated, so more people will start and go out and travel, and with especially low comps for next year as bookings are way down in 2020 this might make the company look much more attractive by this time next year. So, between DoorDash and AirBNB, I clearly like AirBNB a whole damn lot more. In other IPO news, RBNHD is expected to go public as soon as Q1 next year as they seek a valuation of over $20B. Some other Boeing came for companies like Boeing which made its first 737 MAX delivery since the ban ended, as it is expected to start rolling out deliveries and upgrades for current planes at a very good rate with more good news coming from the UK which will suspend the tariffs imposed on US Goods. While PENN gaming ran to an all-time high yesterday after news that sports betting may be launched in Michigan as early as six weeks from now, as legalization of gambling is moving faster and faster in the US, this also bolds well for DraftKings and other gambling stocks. Also, ETSY keeps getting upgrades from analysts as they are expected to have a great Q4 suggested from the most recent November sales data. And finally let’s talk about Apple, as they just revealed the new AirPods Max headphone yesterday, with a huge price tag of 549$, this seemed to gain a pretty bad reaction from consumers as they complained about the huge price tag with competitors like Bose and others selling similar headphones for 350$ or less. These headphones, also have a bigger price tag than even the new PS5 videogame console so we will have to wait and see if this is a successful product from Apple, I think they have gone a little overboard with the price, but rich people do tend to pay a premium for brand names. This can also be seen in the latest analyst call from JPMorgan as customers appear to favor high end models as delivery times have been increasing for the 12 Pro and 12 PRO MAX. On the better side of things for Apple, the Fitness+ service is expected to launch on the 14th of December and it will cost $9.99/month or $79.99$/year. I expect this to be a better success for the company and to drive an even more stable increase of revenues, as subscription-based revenues are better than one-time sales. So, I still like this company the most in the long-term and it might see a spike in the near future, especially moving closer to Q4 results and earnings. Apple is still the biggest position in my portfolio and I am not planning on changing that anytime soon. Good luck to everyone in the stock market as the futures are mixed while writing this post with the DOW and SP500 gaining ground while the Nasdaq futures are just down for the moment. Thank you everyone for reading! Hope you enjoyed the content! Be sure to leave a comment down below with your opinion on the stock market! Have a great day and see you next time!
There are some heavy hitters on GME's Board and in the C-Suite. IMHO, the company should have spoken out about what's happening regarding their stock. They should also have a plan to address changes in the marketplace re Covid19, the push for digital and cryptocurrency, etc. Positive statements from them would improve the stability of the stock. Why have they been silent throughout this entire event? Wouldn't they speak out against the disparaging remarks from various HF reps in recent weeks which have negatively impacted the value of the stock? Or, do they agree with the HFs that the stock is worthless, which would suggest that GME is behind a pump and dump which has enriched them and left us holding the bag? This is the kind of letter we need to send, en mass, to the Chairman of the Board: Kathy Vrabeck, and to the media.
George ShermanChief Executive Officer and Director George E. Sherman is the chief executive officer of GameStop. He was appointed to this role in April 2019.George is a member of GameStop’s Board of Directors, a seat he has held since April 2019.George brings to GameStop more than 25 years of senior management experience serving in a variety of retail leadership roles for several major retail brands like Advance Auto Parts, Best Buy, Target and Home Depot.Prior to joining GameStop, George served as CEO of Victra, the largest exclusive authorized retailer for Verizon Wireless products and services. Before this, he served as president and interim CEO for Advance Auto Parts where he was responsible for more than 4,000 stores, merchandising, marketing, IT, supply chain and commercial sales.George also served as president of Best Buy Services, where he led consumer services, small- and medium-business capabilities, channel partnerships and Best Buy for business. Prior to Best Buy, he ran the operations and home services divisions of Home Depot and spent 14 years with the Target Corporation in various leadership roles.He received his master’s degree from Central Michigan University and served as an officer in the United States Air Force for nearly seven years. George is an active community volunteer with veteran’s causes and currently serves on the board of directors of Building Homes for Heroes, which builds mortgage free homes catered to the unique needs of disabled veterans.
Jim BellEVP and Chief Financial Officer Jim Bell serves as Executive Vice President and Chief Financial Officer for GameStop, a role he was appointed to in June of 2019. Prior to joining GameStop, Jim served as CFO and interim CEO of Wok Holdings, Inc., the parent company of P.F. Chang’s, Pei Wei and True Food Kitchen restaurants, where he successfully designed and led the company’s overall strategic plan and omnichannel digital transformation and the successful sale of each of these brands. Previously, Jim served as EVP and CFO at RLH Corporation and President and CEO of Coldwater Creek, Inc. Earlier in his career he held senior finance roles at Harry & David Holdings, Inc. and The Gap. Jim received his MBA from the University of Maryland and a B.S. in Economics from the U.S. Naval Academy. Following graduation, Jim served as a Naval Flight Officer leading squadron and flight operations in the U.S. Navy from 1989 to 1998.
Dan ReedGeneral Counsel and Corporate Secretary Dan Reed serves as General Counsel and Corporate Secretary for GameStop. In this role, Dan oversees all company domestic and international legal matters and works closely with the executive leadership team and the Board of Directors to ensure legal compliance and success in meeting business objectives.Prior to joining GameStop in 2006, Dan worked in private practice as a business lawyer. Dan holds a J.D. degree from the University of Texas and a bachelor’s degree from Texas A&M University.
Board of Directors
Kathy VrabeckBoard Chair Kathy P. Vrabeck is Board Chair and a member of the Compensation Committee. She has served as a Director since June 2012. She is currently a senior client partner in the consumer markets division of Korn Ferry. Previously, she was a Partner at Heidrick & Struggles International, Inc. (“Heidrick & Struggles”) in their Media, Entertainment and Digital practice. Prior to joining Heidrick & Struggles in July 2011, Vrabeck was with Legendary Pictures from March 2009 to March 2011 where she served as president, Legendary Digital and was responsible for the creation, management and delivery of digital entertainment, with a focus on video games, across current and next-generation platforms. From May 2007 to November 2008, Vrabeck was with Electronic Arts, Inc. (“EA”) where she served as president, EA Casual Entertainment and led EA’s efforts in the fastest growing segments of the video game market: mobile, online, social networking and global media sales. Prior to joining EA, Vrabeck was with Activision, Inc. (“Activision”) from August 1999 to April 2006 where she served as president, Activision Publishing, overseeing Activision’s product development and global brand management and publishing operations. Earlier in her career, Vrabeck held various marketing, sales and finance positions with ConAgra, The Pillsbury Company, Quaker Oats and Eli Lilly and Company. Vrabeck currently serves on the DePauw University Board of Trustees.
George ShermanChief Executive Officer and Directo rGeorge E. Sherman is the chief executive officer of GameStop. He was appointed to this role in April 2019.George is a member of GameStop’s Board of Directors, a seat he has held since April 2019.George brings to GameStop more than 25 years of senior management experience serving in a variety of retail leadership roles for several major retail brands like Advance Auto Parts, Best Buy, Target and Home Depot.Prior to joining GameStop, George served as CEO of Victra, the largest exclusive authorized retailer for Verizon Wireless products and services. Before this, he served as president and interim CEO for Advance Auto Parts where he was responsible for more than 4,000 stores, merchandising, marketing, IT, supply chain and commercial sales.George also served as president of Best Buy Services, where he led consumer services, small- and medium-business capabilities, channel partnerships and Best Buy for business. Prior to Best Buy, he ran the operations and home services divisions of Home Depot and spent 14 years with the Target Corporation in various leadership roles.He received his master’s degree from Central Michigan University and served as an officer in the United States Air Force for nearly seven years. George is an active community volunteer with veteran’s causes and currently serves on the board of directors of Building Homes for Heroes, which builds mortgage free homes catered to the unique needs of disabled veterans.
Carrie TeffnerDirector Carrie Teffner is a director and was appointed to the board in 2018. Carrie is chair of the Audit Committee and brings 30 years of financial leadership and experience in the consumer products and retail industries. Carrie has served as Executive Vice President and Chief Financial Officer of Crocs (NASDAQ: CROX) since 2015. Before assuming her executive positions at Crocs, she served on the Crocs board of directors, which she joined in June 2015. Prior to joining Crocs, she served as Executive Vice President and Chief Financial Officer at PetSmart and, before that, at Weber-Stephen Products. Prior to those roles, she served as Senior Vice President and Chief Financial Officer of Timberland and spent 21 years in various leadership positions at Sara Lee Corporation. Carrie holds Master of Business Administration and Bachelor of Science degrees from the University of Vermont.
Raul FernandezDirector Raul is a director and was appointed to GameStop’s board in April 2019. He serves as a member of the company’s Audit Committee. Raul serves as Vice Chairman and Owner of Monumental Sports & Entertainment, a private partnership that co-owns the NBA’s Washington Wizards, the NHL’s 2018 Stanley Cup Champion Washington Capitals, the WNBA’s Washington Mystics, Team Liquid eSports and Wizards District Gaming NBA 2K, as well as co-owns and operates Capital One Arena in Washington, D.C. He also serves as Special Advisor and Limited Partner to General Atlantic Partners, a growth equity firm with more than $31 billion under management. He previously served in several leadership roles at various technology companies, including as Chairman and CEO for Object Video, a leading developer of intelligent video surveillance software. He holds a bachelor’s degree in economics from the University of Maryland and is an active philanthropist, focusing his energy primarily on education reform in the D.C. region.
Lizabeth DunnDirector Lizabeth is a director and was appointed to GameStop’s board in April 2019. She serves as a member of the company’s Nominating and Corporate Governance Committee and the Compensation Committee. Lizabeth is the Founder and CEO of Pro4ma Inc, an information technology services consulting firm that provides cloud-based data forecasting and predictive analytics tools to retailers. She also is the Founder and CEO of Talmage Advisers, a retail and branded consumer products consulting firm that provides a full range of services across brand strategy, pricing analysis, financial benchmarking and transactional due diligence. Prior to founding these firms, Lizabeth served in various consulting and financial analyst roles for leading financial firms and retail organizations, including Macquarie Group, FBR, Thomas Weisel, Prudential Equity Group, Bear Stearns, Gap Inc. and Liz Claiborne. She holds a bachelor’s degree in economics from Spelman College.
William SimonDirector Bill Simon has more than 30 years of operational and strategic advisory experience in the retail, consumer and food and beverage industries. Since 2014, he has served as a Senior Advisor at KKR & Co. Mr. Simon previously served in multiple leadership roles at Walmart Inc. from 2006 to 2015, including as President and CEO of Walmart U.S. from 2010 to 2014; EVP and COO of Walmart U.S. from 2007 to 2010; and as EVP, Professional Services and New Business Development from 2006 to 2007. Earlier in his career, Mr. Simon served as VP of Marketing, Beverages at Cadbury Schweppes plc and held leadership roles of increasing responsibility at PepsiCo, Inc., after beginning his career at RJR Nabisco. Bill holds an MBA and a Bachelor’s degree in Economics from the University of Connecticut. Mr. Simon was appointed to the board in 2020 and serves as a member of the Audit Committee and the chair of the Nominating and Corporate Governance Committee.
James SymancykDirector Mr. Symancyk brings more than 25 years of executive leadership and operational experience in the retail and consumer products industries. He has served as President and CEO of PetSmart, Inc. since 2018. Mr. Symancyk previously served as President and CEO of Academy Sports & Outdoors, Inc., a retail and ecommerce sporting goods chain, from 2015 to 2018. Prior to that, he held leadership roles of increasingly responsibility at Meijer, Inc., a regional supercenter chain store, including as President; COO; and EVP, Merchandising & Marketing. He began his career at Sam’s Club, where he served as Divisional Merchandise Manager, among other roles. Mr. Symancyk holds a Bachelor’s degree from the University of Arkansas. Mr. Symancyk was appointed to the board in 2020 and serves as the chair of the Compensation Committee.
Reginald Fils-AiméDirector Reggie brings more than 35 years of experience transforming companies, revitalizing brands and reshaping industries. From 2006 to 2019, he served as President and COO of Nintendo of America, Inc. During his tenure, Mr. Fils-Aimé focused on the development and launch of industry re-defining products, including the Nintendo DS, Wii, Nintendo 3DS and Nintendo Switch, quadrupling the company’s revenue from 2005 to 2010, and oversaw the successful implementation of the company’s digital strategy. He previously served as Nintendo of America’s EVP of Sales and Marketing from 2003 to 2006. Prior to joining Nintendo, Mr. Fils-Aimé served as SVP of Marketing for VH1 from 2001 to 2003, where he led a strategic shift to appeal to younger consumers that resulted in an increase in ratings of more than 30 percent. Earlier in his career, he held multiple marketing roles at a variety of consumer and manufacturing companies, including the Derby Cycle Corporation, Guinness Import Company, Panda Management Company, Inc., Pizza Hut, Inc. and the Procter & Gamble Company. Mr. Fils-Aimé holds a Bachelor’s degree in Applied Economics from Cornell University. Mr. Fils-Aimé was appointed to the board in 2020 and serves as a member of the Nominating and Corporate Governance Committee.
Kurt WolfDirector Mr. Wolf is the Managing Member and Chief Investment Officer of Hestia Capital Management LLC. Previously, Mr. Wolf worked in a variety of financial, investing and operating roles, at First Q Capital, LLC, and as a co-Founding Partner at Lemhi Ventures LLC. Earlier in his career, Mr. Wolf worked as a consultant both with Deloitte Consulting and The Boston Consulting Group. Mr. Wolf earned a Master of Business Administration degree from the Stanford Graduate School of Business and a Bachelor of Arts degree in Economics and Mathematics from Carleton College. Mr. Wolf joined the board in 2020 and serves as a member of the Nominating and Corporate Governance Committee.
Paul EvansDirector Mr. Evans is a Senior Managing Director at Dillon Kane Group. Additionally, Mr. Evans is a Board Director at Hill International, Inc. Prior to this, Mr. Evans served in a variety of senior executive roles at MYR Group Inc. Earlier in his career, Mr. Evans held a number of executive management positions at several energy-related businesses. Mr. Evans is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. Mr. Evans received a B.B.A in Accounting from Stephen F. Austin State University and a Masters of International Management from Thunderbird School of Global Management. Mr. Evans joined the board in 2020 and serves as a member of the Audit Committee.
Chewy crushes earnings reports, while GameStop disappoints. What is the latest news on Apple and the new AirPods Max? Should we buy AirBNB or DoorDash when they launch tomorrow? Let’s talk about this and more about the stock market Hey everyone and Good Morning! So, let’s start with the recap of yesterday as we saw the Nasdaq Composite leading the way up half a percent, the SP500 up .28%, both of them closing at new record highs with the Dow Jones also up .35% to close Tuesday. The VIX also showed a steady decline through the day as it dropped almost 3%. This moves in the market were caused by the latest hopes for a stimulus deal to be agreed on by the end of current session in congress as there seems to be a lot of ground on which parties can agree on. Things have gotten worse in the economy since this hole stimulus talk has been going around, so, if both parties would have been more willing to give up some ground, people would have already gotten more support and we would probably be talking about other bills or measures that would have helped even more. So, maybe this latest Mnuchin proposal with maybe minor tweaks would be the best chance of anything happening by the end of this year. We saw more companies advancing yesterday as over 3 thousand companies were moving up, continuing the huge bull run started in November as more than 84% of companies are moving above the 50 and 200-day moving averages. The best gaining sectors yesterday were Energy and Health Care while Real Estate and Utilities lagged behind as Large-Cap Growth companies were the only company factor analysis that lost ground yesterday, with small-caps, especially small-cap growth companies largely outperforming the markets. You can see in this HEAT MAP that there were gains to be made yesterday in a lot of parts of the stock market, with only a few big red spots on the map. Today we will get some numbers on the November Job openings, MBA mortgage applications and Petroleum inventories. While we got some earnings yesterday from Chewy which dazzled again in earnings with the only small miss coming in net sales per customer, but as the number of customers keeps increasing, this might continue to go down, as not every pet owner spends the same amount of big money on pets. The company reported an EBITDA of $5.5M vs a loss of over $9M expected with the gross margin increasing to over 25% while also giving great guidance for Q4 of $1.94B to $1.96B vs less than $1.8B expected by analysts. The company also turned around to a positive cash flow of over $30M. I really like this company and I expected it to be a good own at least for the next quarter until they reach more hard earnings comps next year. Meanwhile, as I expected GameStop had another bad quarter despite beating some earnings estimates with a smaller loss than expected, the revenue still continued to drop over 30% on a year over year basis while comps where even worse missing the expectations by quite a margin. Though e-commerce sales rose by more than 250% in Q3, this did not offset the comparable store sales. Margins also declined with hardware margins being the biggest reasons why. I think this company has a very though challenge on its hands with e-commerce being such a though place to compete in, I think the shift to online has been delayed for this company and I think it will struggle to survive, even though it might see a boost next quarter from the sales of the new gaming consoles that were released last month from both Sony and Microsoft. GME EARNINGS HIGHLIGHTS I wouldn’t touch this stock as I think there are far better plays out there than betting on this struggling company. The only company that I am interested today which will release earnings results is ADOBE which is expected to have the best results ever for the company with an increase of over 12% in both EPS and Revenues. Last go around despite posting great results, the stock fell more than 4% in September and have just recovered to that price point. I expect it this time to go higher and stay that way if they manage to deliver the best quarter on the books. Meanwhile DoorDash is pricing its initial public offering at over 100$/share which I believe is ridiculous, and it is an flat out joke of a valuation, this company has benefited a ton from this economy and still, this valuation implies that they will have over 50% of the total addressable market not in the US, but in the WORLD in the next couple of years, I don’t think this is a good investment opportunity, they will have increasing competition that offer the same thing for free or cheaper, this is a very though business to try and take over as one single company. People will also be way more likely to start going to restaurants maybe not in 2021 but for sure starting 2022 or whenever the vaccines are widely available in the entire world. I wouldn’t touch this stock at such high valuations, especially over 110$, even if I was looking for short-term gains which might end up being the case, I think there are better opportunities out there. In contrast to DoorDash, I might be interested to buy some AirBNB if the price is right after the IPO, I think it will have a much better future, as personally I really like to rent out apartments or homes whenever I go on a vacation rather than a traditional hotel. And even though it might have a tough Q4 and Q1 next year, I expect by Q2 next year more people will be vaccinated, so more people will start and go out and travel, and with especially low comps for next year as bookings are way down in 2020 this might make the company look much more attractive by this time next year. So, between DoorDash and AirBNB, I clearly like AirBNB a whole damn lot more. In other IPO news, RBNHD is expected to go public as soon as Q1 next year as they seek a valuation of over $20B. Some other Boeing came for companies like Boeing which made its first 737 MAX delivery since the ban ended, as it is expected to start rolling out deliveries and upgrades for current planes at a very good rate with more good news coming from the UK which will suspend the tariffs imposed on US Goods. While PENN gaming ran to an all-time high yesterday after news that sports betting may be launched in Michigan as early as six weeks from now, as legalization of gambling is moving faster and faster in the US, this also bolds well for DraftKings and other gambling stocks. Also, ETSY keeps getting upgrades from analysts as they are expected to have a great Q4 suggested from the most recent November sales data. And finally let’s talk about Apple, as they just revealed the new AirPods Max headphone yesterday, with a huge price tag of 549$, this seemed to gain a pretty bad reaction from consumers as they complained about the huge price tag with competitors like Bose and others selling similar headphones for 350$ or less. These headphones, also have a bigger price tag than even the new PS5 videogame console so we will have to wait and see if this is a successful product from Apple, I think they have gone a little overboard with the price, but rich people do tend to pay a premium for brand names. This can also be seen in the latest analyst call from JPMorgan as customers appear to favor high end models as delivery times have been increasing for the 12 Pro and 12 PRO MAX. On the better side of things for Apple, the Fitness+ service is expected to launch on the 14th of December and it will cost $9.99/month or $79.99$/year. I expect this to be a better success for the company and to drive an even more stable increase of revenues, as subscription-based revenues are better than one-time sales. So, I still like this company the most in the long-term and it might see a spike in the near future, especially moving closer to Q4 results and earnings. Apple is still the biggest position in my portfolio and I am not planning on changing that anytime soon. Good luck to everyone in the stock market as the futures are mixed while writing this post with the DOW and SP500 gaining ground while the Nasdaq futures are just down for the moment. Thank you everyone for reading! Hope you enjoyed the content! Be sure to leave a comment down below with your opinion on the stock market! Have a great day and see you next time!
Hi everyone! I am working non-stop provide the best research and analysis regarding DraftKings (NASDAQ: DKNG). I originally posted my overall investment thesis on the company a few weeks back and now I am breaking down and analyzing the latest news and developments regarding DKNG! And no, it is not the ticker symbol for Donkey Kong. DraftKings in my opinion, is the best pure play investment if you want some exposure to the sports betting, iGaming, and daily fantasy sports space. They're founder led (3 founders to be exact) and they're invested into the company themselves right alongside all of us shareholders or potential shareholders. Within the last week, there has been some exciting developments regarding DraftKings. I will share them below: DK Gift Cards Are Live! You can buy a DK gift card as a stocking stuffer for Christmas if you want. I’m really excited to hear this news. It’s only going to increase the brand awareness of DK and that’s what we want. According to the press release on DK’s investor relations website, they’ve partnered with InComm Payments to facilitate the launching of the gift cards. InComm payments is a global leading payments technology company that has a network of retailers that DK will be able to leverage through this partnership. Convenience stores like 7-Eleven, Speedway and Dollar General are just some of the many convenience stores in Incomm Payments’ network that DK will be able to leverage. For now, the gift cards will be offered in $50 and $25 denominations. The great thing about this to me is that they’ve beat their competitors to this. That shows managements initiative and ability to get things done which I complimented when I first picked this company. As of right now, you’re not going to be seeing any “FanDuel” (boo FanDuel *thumbs down emoji*) gift cards in the stores. Tim Richardson, the Senior Vice President at InComm Payments was quoted as saying “DraftKings will benefit from having its brand present in tens of thousands of Incomm Payments’ retail partner locations across the US”. Overall, good news for DK. New York State – Getting desperate? Do they need some online sports gambling revenue? I want to make this clear before I write about this topic – sports betting is already legal in New York state. The problem is, it’s only legal in brick and mortar (retail) locations. Just under a dozen upstate casinos can operate brick and mortar sports books at the moment. In typical DK fashion, they’re already active in a casino in New York State. DK offers in person brick and mortar sports betting through the Del Lago Resort Casino in Waterloo, NY. My news update I’m sharing is that it appears New York state might be considering expanding to online sports betting too due to a budget shortfall they’re experiencing (they need more tax revenue). This news came out on Wednesday, 12/16/20 during the day time. Governor Cuomo had a press conference during the day. The press conference was primarily focused on giving an update on the COVID-19 pandemic in New York state. During the presser, the topic of New York state’s budget shortfalls came up. As a possible financial solution, Cuomo said “Are there other ways to get revenue? How about marijuana? How about sports betting?” He’s referring to the possible tax revenue that could be collected if sports betting offerings were expanded beyond just the brick and mortar offerings. What if every New Yorker could place a sports wager from the comfort of their own home on their cell phone? The battle for legalizing online sports gambling in New York has been going on for years. Governor Cuomo has always been opposed to it. One of the reasons Gov. Cuomo has cited in the past is that he thinks a constitutional amendment would need to be made to New York state law to allow for mobile sports betting in the state. However, one state representative from New York that has been pushing hard for online sports gambling begs to differ. In response to Cuomo’s comments in the presser earlier that day, State Senator Joseph Addabbo said that there would be no constitutional problem with mobile sports betting because the servers could be placed on site of grandfathered in physical casinos. Addabo said that New York state’s need for revenue is “real and immediate” This is a situation to keep a close eye on. The impacts of legalizing mobile sports betting in NY would be substantial for DK as it would open the population of 20 million people in NY state the opportunity to place wagers on the DK Sportsbook app through the comfort of their home. I imagine it wouldn’t be too difficult for DK to mobilize once they get the green light for mobile betting as they already have the standing relationship with Del Lago Resort Casino for in person betting. The Michigan Gaming Control Board (MGCB) granted DK a provisional license to conduct online gaming and sports betting in the state of Michigan For this update I also want to be clear – retail (brick and mortar) and mobile sports betting are already legal in the state of Michigan. It’s just that there’s a lot of yellow tape for Sportsbooks like DK to navigate within a state even after sports betting has become legalized. This provisional license provided by the MGCB was provided to DK and 14 other sportsbooks (including rival FanDuel) on Thursday, December 10th last week. Now there are just a few more regulatory requirements that DK has to meet in the state of Michigan before they can go live. According to http://www.michigan.gov, “Before launch happens, the platform providers must complete additional regulatory requirements including independent testing of platforms and games and MGCB approval of their internal controls, which ensure gaming integrity. The firms also must secure occupational licenses for certain employees.” You can read the full article on Michigan’s government website here. Knowing that DK has a knack for being quick to mobilize once they’re given opportunities in respective states, I fully expect them to pass these last few tests with flying colors. The DK Sportsbook app has already been available in the state of Michigan for “free to enter” games. Once they pass the last few requirements, actual wagers will be allowed to be placed. And money will be allowed to be made! Another promising sign coming out of the state of Michigan, is that on November 30th, 2020, DK became an official sports betting partner of the Detroit Pistons, the NBA basketball team in Michigan. DK Chief Business Officer, Ezra Kucharz, was on the record after the deal closed saying “As our first professional team activation in the state of Michigan, we are thrilled to join forces with the Detroit Pistons ahead of our pending market introduction”. In my opinion, I anticipate we’ll be seeing DK online sports betting in Michigan some time in early 2021. This concludes my update and analysis on DraftKings. TL:DR
Draftkings now offers gift cards and you can buy them in convenience stores (first sports betting company to do so)
DraftKings received a provisional license to conduct sports gambling in Michigan
Governor Cuomo of NY said he would consider legalizing "mobile sports betting" to raise additional tax revenue
If you would like to read my original deep dive and analysis on DKNG, you can check it out here:
Legal Online Sports betting launches in Michigan with 9 operators on Friday 22nd Jan
In December 2019 the Legislature and Governor Gretchen Whitmer legalized internet gambling and sports betting in the state of Michigan. Since then regulators have been planning how to manage, regulate, licence and monitor the new gaming platforms. Michigan residents have long been able to gamble online via offshore operators, and now residents of the state will be finally able to place legal online wagers and play online casino games via in-state licensed online sportsbooks and casinos – beginning at Noon on Friday. more details: https://gamblingindustrynews.com/news/usa/legal-online-sportsbetting-casinos-launch-in-michigan/
Crosspost from wsb Hi everyone, I have started doing weekly valuations and daily market debriefs. What makes me qualified to do this? I work in buyside and get paid to do this. For this week I look at DraftKings, let me know what names you would like me to do next week as well as your feedback. Here is my non-investment advice on DraftKings. What’s new: DKNG reported Quarterly adjusted revenues of $133mn (+42% year-over-year (y/y)), which was at the high-end of the pre-announced $131mn-$133mn range. (link) DKNG also reported adjusted EBITDA of -$197mn, better than Wall St. Consensus expectation of -$203mn. Also with the earnings release, management increased revenue guidance to $540mn to $560mn, and introduced 2021 revenue guidance of $750mn-$850mn (+45% y/y at the midpoint), the consensus estimate was $776mn. This range doesn’t include contributions from Michigan or Virginia, which could both launch online sports betting late this year or early next. Management’s guidance assumes that they continue to operate in all states where they are currently live and announced sport calendars aren’t disrupted. Valuation Methodology: I continue from my initial valuation of DKNG last week – What’s clear is that more states will legalize betting and more Americans will be exposed to sports betting and online gambling avenues and the market will grow overall. What is less clear, however, is how fast this market will grow. I approach this valuation by starting high level, focusing on the growth of online betting markets, and then following with DKNG’s market share of the future betting markets. I believe DKNG is simply a beneficiary of overall online betting market growth, not some standalone idiosyncratic tech pioneer, therefore I believe starting with Total Available Market (TAM) is the best approach for a valuation here. From Deutsche Bank in their updated Note on DKNG ‘Limited Changes to Forecasts’ “We expect the market to continue to trade shares around TAM and growth trajectory views, much of which will be dictated by the pace of legalization and investors garnering a better understanding of how [that] ultimately flows to net revenue and, down the road, EBITDA.” We use 2025 EBITDA as anything beyond five years is simply impossible to predict. Feel free to disagree with me in the comments and tell me why you disagree. I try to keep this analysis high level so we can plug and play growth figures for both the market and DKNG’s share of that future market because analyzing line items or on modelling on revenue multiples, is a pointless exercise for growth companies because appreciating from $500M to $5B is way more likely than $100B to $1trn. This is a rapidly changing company in a disruptive industry and it’s stock price reflects expectations of the future of American online gambling and DraftKings’ ability to capture an increasing share of that market growth. How is the Street valuing DKNG?: Goldman is Neutral rated with a 12-month price target of $53 based on equal parts 2030 EV/EBITDA (discounted), 21.3X 2024 Sales, and a Discounted Cash Flow model. Morgan Stanley is in-line and equal-weighted with a price target of $37 valuing DKNG on a 18.5x 2025 EBITDA model. 18.5X is a comparable tech multiple. Deutsche Bank models DKNG at a price target of $48 on a multiples of 25x 2027 EBITDA, discounted at 5% for 5 years. They note that every 10% move in EBITDA from their current forecast is worth ~$4 to their Price Target and every multiple point is ~$2. Our Model: I start off with management’s 45% y/y growth figure for 2021. I credit DKNG with this growth next year, then crucially, I decrease the growth rate by 5% every year forward, so 40% growth in 22, 35% in 23, etc. because DKNG is starting from a smaller revenue base so 45% will be easier to achieve in 21 than it will be from a higher base in 23. If the online sports betting and gambling markets grow at these rates from 2020-2025 (about a 35% annual growth rate), and DKNG is able to capture a 23% blended total market share of these markets, at a 30% EBITDA margin and 18.5x EBITDA multiplier (we borrow this from MS), I get a valuation of around $39, implying ~9% downside. Let’s look closer: I start off by estimating the online sports betting and gambling market size below. I go off the estimated 2020 figure of around $3.14bn – $1.33bn from sports gambling, $1.5bn from iGaming, and $286mm from Daily Fantasy. Next I grow them by the CAGR’s in the previous paragraph and you see the results. For purposes of this valuation I designate this growth profile as my Base case. I don’t want you to stay fixated on the ~35% CAGR but rather to see the effects of the rate on overall market size come 2025. We can argue all day about the numbers, but trying to estimate the growth of the market to the decimal for 5 years out is not an efficient exercise. This is still a nascent market experiencing a lot of disruption with no clear predecessor case studies. We get a TAM of over $14bn in 2025 with our estimates. Is this a reasonable TAM: Deutsche Bank is a noted Bear on this sort of sports betting TAM Share argument in the 20bn to 25bn range for sports betting. They say in their “A Lot of Unfounded “Expectations” at a Lofty Price; Remain Sell” Note on Penn National, “Said simply, in the period from March 2019 through February 2020, prior to the pandemic, the per adult spend on sports betting (GGNJ adult population) was $51. Given there are 240 mm adults in the US, to arrive at even a $20bn TAM, implied that not only does every state legalize and all 240 mm adults can bet sports on their mobile phones, but that … the adult spend grows by ~65% from this $51 level”. I look at the idea of full legalization and spend per adult in the table below. To get to our $20bn TAM, indeed every US adult would need to be spending $84 a year on sports betting and online gambling. This ties out with DB’s 65% figure. Next I estimate the DraftKings’ EBITDA based on the market size and their share of this future market. An important point is DKNG’s promotions and how much it subtracts from top-line revenue. We use 20% here, but management has stated in the past that promotions are generally in the high 20%’s. We give DKNG credit for being able to continue to decrease promotional activity in the future, so for our 2025 EBITDA analysis we settle on 20%. Just for reference, promotions were ~26% in Q1 and Q2 of this year. I use a healthy 30% EBITDA margin across all levels of market share and market size. As you can see, our Base Case is $785 mm in EBITDA for 2025. Not bad for a company expected to have over negative $400mm in EBITDA for 2020. Finally, given the current stock price of $42.84 at close on 11/13, what is the implied 2025E EBITDA multiple for all these scenarios? Every additional turn in the EBITDA multiple adds ~$2 to our price and every additional $100 mm in 2025 EBITDA adds ~$5. If the market grows by only 15%/ year with lower market share and EBITDA margins in our Bear Case, we get a valuation of $14. Likewise, if the market grows at 45%/year with higher market share and EBITDA margins in our Bull Case, we get a $75 valuation. Upside Risks to Valuation:
Stronger than expected performance in 2021, which could accelerate growth in TAM realizations
Better-than expected margin performance, especially less promotion activity that eats into top-line revenue
DKNG is able to take outsized market share
Favorable regulatory events and large states making progress toward sports betting
Downside Risks to Valuation:
Considerable stock unloaded coming off management lockup agreements from the IPO
TAM expectations becoming more muted, leaving far-out forecasts like the 2025 EBITDA we use being especially vulnerable
Promotional activity could last longer than we think and be a drag on revenue
Greater impact from competitors, leading to decreased market share and/or further necessitated promotional spend
Hello degens, I have started doing weekly valuations and daily market debriefs. What makes me qualified to do this? I work in buyside and am semi-literate. Here is my non-investment advice on DraftKings. What’s new: DKNG reported Quarterly adjusted revenues of $133mn (+42% year-over-year (y/y)), which was at the high-end of the pre-announced $131mn-$133mn range. (link) DKNG also reported adjusted EBITDA of -$197mn, better than Wall St. Consensus expectation of -$203mn. Also with the earnings release, management increased revenue guidance to $540mn to $560mn, and introduced 2021 revenue guidance of $750mn-$850mn (+45% y/y at the midpoint), the consensus estimate was $776mn. This range doesn’t include contributions from Michigan or Virginia, which could both launch online sports betting late this year or early next. Management’s guidance assumes that they continue to operate in all states where they are currently live and announced sport calendars aren’t disrupted. Valuation Methodology: I continue from my initial valuation of DKNG last week – What’s clear is that more states will legalize betting and more Americans will be exposed to sports betting and online gambling avenues and the market will grow overall. What is less clear, however, is how fast this market will grow. I approach this valuation by starting high level, focusing on the growth of online betting markets, and then following with DKNG’s market share of the future betting markets. I believe DKNG is simply a beneficiary of overall online betting market growth, not some standalone idiosyncratic tech pioneer, therefore I believe starting with Total Available Market (TAM) is the best approach for a valuation here. From Deutsche Bank in their updated Note on DKNG ‘Limited Changes to Forecasts’ “We expect the market to continue to trade shares around TAM and growth trajectory views, much of which will be dictated by the pace of legalization and investors garnering a better understanding of how [that] ultimately flows to net revenue and, down the road, EBITDA.” We use 2025 EBITDA as anything beyond five years is simply impossible to predict. Feel free to disagree with me in the comments and tell me why you disagree. I try to keep this analysis high level so we can plug and play growth figures for both the market and DKNG’s share of that future market because analyzing line items or on modelling on revenue multiples, is a pointless exercise for growth companies because appreciating from $500M to $5B is way more likely than $100B to $1trn. This is a rapidly changing company in a disruptive industry and it’s stock price reflects expectations of the future of American online gambling and DraftKings’ ability to capture an increasing share of that market growth. How is the Street valuing DKNG?: Goldman is Neutral rated with a 12-month price target of $53 based on equal parts 2030 EV/EBITDA (discounted), 21.3X 2024 Sales, and a Discounted Cash Flow model. Morgan Stanley is in-line and equal-weighted with a price target of $37 valuing DKNG on a 18.5x 2025 EBITDA model. 18.5X is a comparable tech multiple. Deutsche Bank models DKNG at a price target of $48 on a multiples of 25x 2027 EBITDA, discounted at 5% for 5 years. They note that every 10% move in EBITDA from their current forecast is worth ~$4 to their Price Target and every multiple point is ~$2. Our Model: I start off with management’s 45% y/y growth figure for 2021. I credit DKNG with this growth next year, then crucially, I decrease the growth rate by 5% every year forward, so 40% growth in 22, 35% in 23, etc. because DKNG is starting from a smaller revenue base so 45% will be easier to achieve in 21 than it will be from a higher base in 23. If the online sports betting and gambling markets grow at these rates from 2020-2025 (about a 35% annual growth rate), and DKNG is able to capture a 23% blended total market share of these markets, at a 30% EBITDA margin and 18.5x EBITDA multiplier (we borrow this from MS), I get a valuation of around $39, implying ~9% downside. Let’s look closer: I start off by estimating the online sports betting and gambling market size below. I go off the estimated 2020 figure of around $3.14bn – $1.33bn from sports gambling, $1.5bn from iGaming, and $286mm from Daily Fantasy. Next I grow them by the CAGR’s in the previous paragraph and you see the results. For purposes of this valuation I designate this growth profile as my Base case. I don’t want you to stay fixated on the ~35% CAGR but rather to see the effects of the rate on overall market size come 2025. We can argue all day about the numbers, but trying to estimate the growth of the market to the decimal for 5 years out is not an efficient exercise. This is still a nascent market experiencing a lot of disruption with no clear predecessor case studies. we get a TAM of over $14bn in 2025 with our estimates Is this a reasonable TAM: Deutsche Bank is a noted Bear on this sort of sports betting TAM Share argument in the 20bn to 25bn range for sports betting. They say in their “A Lot of Unfounded “Expectations” at a Lofty Price; Remain Sell” Note on Penn National, “Said simply, in the period from March 2019 through February 2020, prior to the pandemic, the per adult spend on sports betting (GGNJ adult population) was $51. Given there are 240 mm adults in the US, to arrive at even a $20bn TAM, implied that not only does every state legalize and all 240 mm adults can bet sports on their mobile phones, but that … the adult spend grows by ~65% from this $51 level”. I look at the idea of full legalization and spend per adult in the table below. my estimates To get to our $20bn TAM, indeed every US adult would need to be spending $84 a year on sports betting and online gambling. This ties out with DB’s 65% figure. Next I estimate the DraftKings’ EBITDA based on the market size and their share of this future market. An important point is DKNG’s promotions and how much it subtracts from top-line revenue. We use 20% here, but management has stated in the past that promotions are generally in the high 20%’s. We give DKNG credit for being able to continue to decrease promotional activity in the future, so for our 2025 EBITDA analysis we settle on 20%. Just for reference, promotions were ~26% in Q1 and Q2 of this year. I use a healthy 30% EBITDA margin across all levels of market share and market size. As you can see, our Base Case is $785 mm in EBITDA for 2025. Not bad for a company expected to have over negative $400mm in EBITDA for 2020. my estimates Finally, given the current stock price of $42.84 at close on 11/13, what is the implied 2025E EBITDA multiple for all these scenarios? Here’s a table summarizing that below: At the close of 11/13 DKNG is valued at 20.38x our 2025 estimated EBITDA based on our model assumptions and estimates Every additional turn in the EBITDA multiple adds ~$2 to our price and every additional $100 mm in 2025 EBITDA adds ~$5. If the market grows by only 15%/ year with lower market share and EBITDA margins in our Bear Case, we get a valuation of $14. Likewise, if the market grows at 45%/year with higher market share and EBITDA margins in our Bull Case, we get a $75 valuation. I layout some clearer BeaBase/Bull Case scenarios at the bottom as well in more detail: https://preview.redd.it/00glviwy0qz51.png?width=888&format=png&auto=webp&s=79caa9668938824c4a72a08756fc7112f9e68b77 https://preview.redd.it/vnw9yn8x0qz51.png?width=883&format=png&auto=webp&s=6d70a6abf1c30558d116063886e5fb5678d749de Upside Risks to Valuation:
Stronger than expected performance in 2021, which could accelerate growth in TAM realizations
Better-than expected margin performance, especially less promotion activity that eats into top-line revenue
DKNG is able to take outsized market share
Favorable regulatory events and large states making progress toward sports betting
Downside Risks to Valuation:
Considerable stock unloaded coming off management lockup agreements from the IPO
TAM expectations becoming more muted, leaving far-out forecasts like the 2025 EBITDA we use being especially vulnerable
Promotional activity could last longer than we think and be a drag on revenue
Greater impact from competitors, leading to decreased market share and/or further necessitated promotional spend
Negative legislative outcomes
If you like this content and want more check out the blog I just started. millennialmkts.com
West Virginia Online Casino Finally Goes Live As DraftKings Launches
“With a surprise launch, West Virginia has just become the fourth US state with legal online casino gambling alongside New Jersey, Pennsylvania, and Delaware. DraftKings was the first operator to go live with a WV online casino, announcing its app is now available for both iOS and Android devices in the state. News came in the form of a brief press release issued Wednesday afternoon. DraftKings Casino is also available as a standalone app in PA and NJ, as well as embedded into the DraftKings Sportsbook platform in all three states. Michigan online casinos will additionally go live either later this year or early in 2021, where DraftKings has a path to market under a tribal partnership.” https://www.onlinepokerreport.com/43397/west-virginia-online-casino-live-with-draftkings/
Chewy crushes earnings reports, while GameStop disappoints. What is the latest news on Apple and the new AirPods Max? Should we buy AirBNB or DoorDash when they launch tomorrow? Let’s talk about this and more about the stock market Hey everyone and Good Morning! So, let’s start with the recap of yesterday as we saw the Nasdaq Composite leading the way up half a percent, the SP500 up .28%, both of them closing at new record highs with the Dow Jones also up .35% to close Tuesday. The VIX also showed a steady decline through the day as it dropped almost 3%. This moves in the market were caused by the latest hopes for a stimulus deal to be agreed on by the end of current session in congress as there seems to be a lot of ground on which parties can agree on. Things have gotten worse in the economy since this hole stimulus talk has been going around, so, if both parties would have been more willing to give up some ground, people would have already gotten more support and we would probably be talking about other bills or measures that would have helped even more. So, maybe this latest Mnuchin proposal with maybe minor tweaks would be the best chance of anything happening by the end of this year. We saw more companies advancing yesterday as over 3 thousand companies were moving up, continuing the huge bull run started in November as more than 84% of companies are moving above the 50 and 200-day moving averages. The best gaining sectors yesterday were Energy and Health Care while Real Estate and Utilities lagged behind as Large-Cap Growth companies were the only company factor analysis that lost ground yesterday, with small-caps, especially small-cap growth companies largely outperforming the markets. You can see in this HEAT MAP that there were gains to be made yesterday in a lot of parts of the stock market, with only a few big red spots on the map. Today we will get some numbers on the November Job openings, MBA mortgage applications and Petroleum inventories. While we got some earnings yesterday from Chewy which dazzled again in earnings with the only small miss coming in net sales per customer, but as the number of customers keeps increasing, this might continue to go down, as not every pet owner spends the same amount of big money on pets. The company reported an EBITDA of $5.5M vs a loss of over $9M expected with the gross margin increasing to over 25% while also giving great guidance for Q4 of $1.94B to $1.96B vs less than $1.8B expected by analysts. The company also turned around to a positive cash flow of over $30M. I really like this company and I expected it to be a good own at least for the next quarter until they reach more hard earnings comps next year. Meanwhile, as I expected GameStop had another bad quarter despite beating some earnings estimates with a smaller loss than expected, the revenue still continued to drop over 30% on a year over year basis while comps where even worse missing the expectations by quite a margin. Though e-commerce sales rose by more than 250% in Q3, this did not offset the comparable store sales. Margins also declined with hardware margins being the biggest reasons why. I think this company has a very though challenge on its hands with e-commerce being such a though place to compete in, I think the shift to online has been delayed for this company and I think it will struggle to survive, even though it might see a boost next quarter from the sales of the new gaming consoles that were released last month from both Sony and Microsoft. GME EARNINGS HIGHLIGHTS I wouldn’t touch this stock as I think there are far better plays out there than betting on this struggling company. The only company that I am interested today which will release earnings results is ADOBE which is expected to have the best results ever for the company with an increase of over 12% in both EPS and Revenues. Last go around despite posting great results, the stock fell more than 4% in September and have just recovered to that price point. I expect it this time to go higher and stay that way if they manage to deliver the best quarter on the books. Meanwhile DoorDash is pricing its initial public offering at over 100$/share which I believe is ridiculous, and it is an flat out joke of a valuation, this company has benefited a ton from this economy and still, this valuation implies that they will have over 50% of the total addressable market not in the US, but in the WORLD in the next couple of years, I don’t think this is a good investment opportunity, they will have increasing competition that offer the same thing for free or cheaper, this is a very though business to try and take over as one single company. People will also be way more likely to start going to restaurants maybe not in 2021 but for sure starting 2022 or whenever the vaccines are widely available in the entire world. I wouldn’t touch this stock at such high valuations, especially over 110$, even if I was looking for short-term gains which might end up being the case, I think there are better opportunities out there. In contrast to DoorDash, I might be interested to buy some AirBNB if the price is right after the IPO, I think it will have a much better future, as personally I really like to rent out apartments or homes whenever I go on a vacation rather than a traditional hotel. And even though it might have a tough Q4 and Q1 next year, I expect by Q2 next year more people will be vaccinated, so more people will start and go out and travel, and with especially low comps for next year as bookings are way down in 2020 this might make the company look much more attractive by this time next year. So, between DoorDash and AirBNB, I clearly like AirBNB a whole damn lot more. In other IPO news, RBNHD is expected to go public as soon as Q1 next year as they seek a valuation of over $20B. Some other Boeing came for companies like Boeing which made its first 737 MAX delivery since the ban ended, as it is expected to start rolling out deliveries and upgrades for current planes at a very good rate with more good news coming from the UK which will suspend the tariffs imposed on US Goods. While PENN gaming ran to an all-time high yesterday after news that sports betting may be launched in Michigan as early as six weeks from now, as legalization of gambling is moving faster and faster in the US, this also bolds well for DraftKings and other gambling stocks. Also, ETSY keeps getting upgrades from analysts as they are expected to have a great Q4 suggested from the most recent November sales data. And finally let’s talk about Apple, as they just revealed the new AirPods Max headphone yesterday, with a huge price tag of 549$, this seemed to gain a pretty bad reaction from consumers as they complained about the huge price tag with competitors like Bose and others selling similar headphones for 350$ or less. These headphones, also have a bigger price tag than even the new PS5 videogame console so we will have to wait and see if this is a successful product from Apple, I think they have gone a little overboard with the price, but rich people do tend to pay a premium for brand names. This can also be seen in the latest analyst call from JPMorgan as customers appear to favor high end models as delivery times have been increasing for the 12 Pro and 12 PRO MAX. On the better side of things for Apple, the Fitness+ service is expected to launch on the 14th of December and it will cost $9.99/month or $79.99$/year. I expect this to be a better success for the company and to drive an even more stable increase of revenues, as subscription-based revenues are better than one-time sales. So, I still like this company the most in the long-term and it might see a spike in the near future, especially moving closer to Q4 results and earnings. Apple is still the biggest position in my portfolio and I am not planning on changing that anytime soon. Good luck to everyone in the stock market as the futures are mixed while writing this post with the DOW and SP500 gaining ground while the Nasdaq futures are just down for the moment. Thank you everyone for reading! Hope you enjoyed the content! Be sure to leave a comment down below with your opinion on the stock market! Don't forget to check out my YouTube Channel! Have a great day and see you next time!
Going through old issues of the Wrestling Observer Newsletter and posting highlights in my own words. For anyone interested, I highly recommend signing up for the actual site at f4wonline and checking out the full archives. PREVIOUSLY:
Going into Wrestlemania 18, a cloud of uncertainty hangs over the WWF. While the return of the NWO managed to spike a big buyrate for No Way Out and Rock/Hogan is probably gonna be huge for WM buyrates, it hasn't really affected TV ratings in any meaningful way. And this is the big part of the year. That doesn't bode well for the usual decline in business that always comes after Wrestlemania. From here, Dave just spends paragraphs talking about how bad booking over the last year has tanked the company from the peak they were at the previous year and what they should be doing different. And he's not wrong. In retrospect, with 18 years hindsight, pretty much all of this is right on the money. Way back as far as late '97, Dave was pointing out all the cracks starting to form in WCW and was trying to sound the alarm. Here in 2002, he's trying to do the same with WWF and sure enough, he ends up being right. The next two decades have been one continuous slow decline in popularity, for pretty much all the reasons Dave is warning about here. It's all really interesting, but it's not news. It's just business analysis.
Which brings us to next week's Wrestlemania. Dave says there's never in the past been a Wrestlemania where the world title match had so little buzz going into it. Jericho as the WWF champion has been rendered completely secondary to the Triple H/Stephanie feud. But as of now, that match is still expected to go on last, even though all the advertising and mainstream publicity for the show is built around the Rock/Hogan match. Even Steve Austin, the biggest PPV draw in company history for the last 4 years, isn't being heavily featured in the promotion of the show (and boy, was he salty about it as it turned out). The NWO angle has pretty much been seen internally as a flop and there's not much further for them to go as a group after the show. After Mania is the brand split, which in theory should freshen things up and lead to some developmental stars being called up. But Austin and Rock are supposed to anchor each show respectively and Rock is expected to take a few months off this summer to film another movie (The Rundown) so that's gonna hurt the star power on whatever show he ends up on.
More worrisome is that there have been pay cuts. Several wrestlers were approached this week and asked to take cuts to their downside guarantees. Dave talks about how Vince never wanted to pay anyone guarantees in the first place and only started doing so in 1996 when WCW forced his hand. So far, all the wrestlers asked were developmental stars or former WCW/ECW Alliance members who haven't been used on TV since the Invasion angle ended at Survivor Series. But it's expected more pay cuts are coming, especially for anyone who's contracts are coming due because obviously, no one has any negotiating leverage anymore. Chris Jericho is probably the biggest star who's deal is up for renewal soon and obviously, he's not exactly in a prime spot to play hardball. He's a much bigger star now than he was 3 years ago, so he'll probably still get a raise. But it won't be nearly would he could get if WCW still existed. (For this reason alone, I can't comprehend why anyone would want AEW to fail if you're a wrestling fan. And yet.)
The pay cuts seem to be about $25K-per-year each. So for instance, the guys making $125K per year are being cut down to $100K. Then $100K guys down to $75K. Or in the case of the lowest paid guys, the $75K guys are being cut to $52K. WWF tried to soften the blow by saying that if/when these guys start working on TV and working regular house shows, then they start getting merch money and house show cuts and so they'll probably make more than their downside anyway. But anyone who's ever gotten a pay cut knows that's some corporate doublespeak bullshit. With nowhere else to make a living in wrestling, most of these guys are pretty much forced to smile and take it, but needless to say, they aren't happy. These people aren't rich and a $25K-per-year pay cut makes quite a bit a difference. And it's not like WWF needs to do this. They're still very profitable and they just offered the NWO guys monstrously huge contracts. This is just what happens when you have a monopoly on the industry and you don't have to pay your employees fairly. You could. But fuck them, right? (Man, this sure feels prescient in a world where a company light years more profitable now than at any time in its history just fired a bunch of people when they didn't have to.)
Oh yeah, back to Wrestlemania preview. Dave runs down all the matches and what we know. Rock, Hogan, and Pat Patterson spent all day together at a gym in Florida last week choreographing their match. Apparently during his comeback house show match with Rikishi in Tampa last week, Hogan broke a rib and tried to keep it secret from everyone, but they found out. He's still expected to work Wrestlemania (he wouldn't miss it under any circumstances) but they're concerned about how much he'll be able to do. Also, because this is Toronto and he's so beloved there, WWF is expecting Hogan to get a huge reaction from the crowd (yeah, that's putting it mildly). Jericho/Triple H on paper should be a great match (they've had some classics together in the past) but the build-up has killed Jericho and the result is a foregone conclusion. Austin/Hall should be fine. UndertakeFlair has had the best build and for storyline reasons, Flair should win. But Dave ain't holding his breath. So on and so forth.
Yup, this is definitely a slow news week. Now Dave writes a huge piece on the history of major shows in wrestling and how that led to the birth of Wrestlemania. How Vince gambled everything on the first WM and how closed circuit was such a vital part of the success. Talks about the history of closed circuit with wrestling, with the first national pro wrestling-ish event being broadcast nationally on CCTV was the Inoki/Muhammad Ali match, which featured other wrestling matches on the undercard. The inclusion of Mr. T and Cyndi Lauper were critical to the success of the first Wrestlemania and Roddy Piper's racist promos to Mr. T turned him into an mainstream celebrity along with Hogan. And then WM2 and WM3 and oh god, I'm just realizing as I type this that Dave has written multiple paragraphs about each Wrestlemania. This is fascinating stuff to read as a history buff and I seriously can't recommend it enough if you're subscribed to go read this. But I ain't recapping all that haha.
More news on Jerry Jarrett's planned promotion, with the idea of doing $9.95 weekly PPV shows. Jerry and his son Jeff are now both fully involved with this, with the idea that they would be co-owners. Despite rumors, Jerry has denied that Vince Russo is involved in the company, but others are saying he'll be writing for them secretly (as mentioned last week, Time Warner execs only agreed to represent him in his lawsuit with Hulk Hogan if he doesn't work for any other wrestling company, so he can't openly be working with the company). The idea seems to be to pay the wrestlers $1,000 to $2,500 per show and run about 26 shows per year. In the meantime, the wrestlers would be allowed to work any other indies but wouldn't be allowed to work PPV or TV for anyone else. The problem here is the WWA promotion is still trying to gain a foothold in America and they want to use a lot of the same talent and Jeff Jarrett has involvement in both companies. Jeff is reportedly trying to work out an agreement where they can all share stars and get along but Dave says that's problematic when you have two companies using the same guys and trying to book different storylines and run separate PPVs. Jarrett's new company is looking to sign a core group of names to build around and Dave says you damn well better have them signed, because WWF will pluck away anyone who starts to gain any success. Jarrett is said to be interested in signing Scott Steiner, Eddie Guerrero, and Rey Mysterio for the new company. Anyway, Dave crunches the numbers and being very conservative, this new company would need to make at least $125,000 per week on PPV just to break even. And that's being optimistic. Once you take out the PPV company's cut, Dave estimates they would need to pull 31,000 buys at least to even think of breaking even. And again, that's being extremely conservative and assuming this company runs an extremely low-cost production. To have something with good production values that can be taken seriously as competition, you'd probably have to do double that. And even with national television, WCW and ECW weren't doing that many PPV buys by the end. So Dave is skeptical that this Jarrett promotion is gonna manage it without any TV. Not to mention, where are they gonna tape? Multiple cities? Gotta promote them and draw crowds. Dave thinks you'd have to heavily paper the crowd. And it takes months for PPV money to come in, which means Jarrett is gonna have to eat all these costs at the start. Basically, this idea is gonna be difficult to pull off (yup. If Panda Energy hadn't bailed them out, they were gonna be dead within the first 6 months under this plan).
Big story about how the Vitor Belfort vs. Chuck Liddell fight has been cancelled. Why? Well, Belfort's lawyers sent a letter to UFC officials claiming that the fighter was sick with a malaria-like disease (ended up being dengue fever) and due to the medication he was on, he wasn't able to train properly. Sounds reasonable enough, yeah? Well....turns out Belfort isn't too sick to collect a paycheck in other ways. Belfort is the newest cast member of a Brazilian reality show called "Casa dor Artistas 2" which is basically exactly like Big Brother, in which a bunch of people are locked in this house with no contact to the outside world and are on camera 24/7 online, with daily edited versions airing on TV. So Belfort has now committed to being locked in this house for the next 90 days for a TV show, which means he couldn't make the fight with Liddell, scheduled for May. The winner of that fight was expected to face Tito Ortiz later this year, and Belfort vs. Ortiz is the big fight everyone has been clamoring for, and has already been postponed or canceled two other times (don't end up getting Belfort/Ortiz until 2005, and it ends up being a controversial split decision win for Ortiz).
Former Memphis area wrestler The Dream Machine passed away of a heart attack at age 47. Dave says he was possibly the greatest talker of the last 25 years who never made it big nationally. Dave recaps his career in the 70s and 80s, with lots of quotes from Jim Cornette and Jimmy Hart. I pulled up a promo just outta curiosity.
All Japan Women held its first ever show on PPV this week, while facing an uncertain future. AJW is the 3rd longest-running promotion in the world (behind CMLL and WWF) but they've been struggling financially for years. And at the end of this month, they're losing their TV deal with Fuji Network, which has aired their show for 25 years. Anyway, the PPV was fine but something was missing. Manami Toyota, unquestionably the greatest female wrestler to ever live, stole the show in an excellent match, but otherwise, nothing memorable.
Kiyoshi Sagawa passed away at age 79 this week. You probably don't know Sagawa's name, but he was the largest shareholder of NJPW and was the founder of Sagawa Kyubin, which is basically Japan's version of FedEx. Sagawa was a billionaire and owned the largest percentage of NJPW stock. He alone owned 40% of the company. It's believed Sagawa's shares will be bequeathed to Antonio Inoki, who currently holds 15%. This would give him Inoki a 55% stake in the company. But Dave doesn't expect much to change because Sagawa always backed Inoki anyway, so it's not like day-to-day is going to be any different.
Eddie Guerrero debuted on the latest NJPW tour, teaming with Minoru Tanaka and Black Tiger. It's interesting because several years ago, Guerrero portrayed the role of Black Tiger. This time, it was played by Silver King. During the match, Guerrero and Black Tiger turned heel on their partner and joined their opponents in a 5-on-1 beatdown of Minoru Tanaka. Word is Guerrero looked really good on this tour so far (yeah, he was on fire during this time. Guerrero only works about 10 shows for NJPW on this tour and then WWF re-hires him and the rest is history).
Hayabusa is said to have regained feeling in much of his body and can move his left arm somewhat, after suffering the career-ending injury back in October that left him paralyzed.
Speaking of, Atsushi Onita and former FMW star Kodo Fuyuki are working an angle together over the dead FMW promotion. At an indie show, Onita came out and accused Fuyuki and FMW general manager Sakichi Nakamura of mismanaging FMW and using the company's money to make themselves rich while allowing the promotion to die. Onita also talked about how they stopped paying Hayabusa's hospital bills and used the money to enrich themselves. This is all leading up to Onita vs. Fuyuki soon, and of course Onita is using Hayabusa's injury as part of his angle. Because Onita is the carniest carny to ever carny.
A made-for-TV movie about the life of Nobuhiko Takada and his marriage to TV personality Aki Mukai aired in Japan this week and was a huge ratings hit. Takada of course is a former pro wrestler turned MMA fighter who, frankly, should have stuck to worked fights because his reputation as a shoot fighter has been destroyed time and again in real shoots. He married Mukai, who is the host of a popular morning TV show (she's basically Japan's Katie Couric, Dave says) and she has been battling cancer recently. The movie was a tearjerker story about their inability to have children due to her cancer. The couple is looking to adopt a kid in the U.S. because adoption is apparently extremely difficult in Japan.
Dan Severn regained the NWA title from Shinya Hashimoto at a Zero-One show in Japan this week. NWA president Jim Miller was there and a NWA Jersey (and American) referee officiated the match. The match ended with a screwjob finish, with the American ref fast-counting Hashimoto to give Severn the victory, which the fans haaaaaated and Dave thinks pretty well tarnishes whatever legacy the NWA title still has, in the one country where fans still sorta respect that belt. Dave says the idea here is Hashimoto is such a bigger star than Severn that he couldn't feasibly do a clean job to him in his own promotion. But Hashimoto doesn't want to go to America and defend the NWA title on a bunch of tiny indie shows for 100 people either, so he agreed to drop it back to Severn this way.
Remember that Matrats promotion Eric Bischoff was involved in that sorta disappeared off the radar? It's not dead! Yet. Bischoff, who hates dirt sheets, thinks they're all lies, and has never confided in Dave Meltzer, did an interview with the Wrestling Observer website this week and talked about the plans for the company. It has been renamed Next Generation Wrestling and Bischoff talked as if they still plan to go into production for a TV series later this summer, but he admitted everything isn't yet finalized. Bischoff said the matches won't have pinfalls or submissions but will instead of have ringside judges awarding points for creativity and execution. Dave doesn't seem to be super on board with this concept (yeah, it goes nowhere).
WWA promoter Andrew McManus claimed after the PPV disaster in Las Vegas that he would never again advertise anyone for a show that he doesn't have signed to a contract. So needless to say, the upcoming tour in Australia has names like Sid Vicious, Jeff Jarrett, Road Dogg, Buff Bagwell, Eddie Guerrero, Rey Mysterio, Scott Steiner, Sabu, Juventud Guerrera, and others being promoted. Needless to say, almost none of them have contracts with this company (most of them end up working the shows, but several do not). Speaking of WWA, after claiming they didn't get paid for their appearances at the Vegas show, both Terry Taylor and Larry Zbyszko have now been paid.
Sid Vicious is in a commercial for an Alabama chain of restaurants called Jack's Hamburgers. The commercial shows a guy golfing when Sid comes in and slams him. Then it says "some things don't mix, like golf and wrestling" but then it says some things like the new Jack's bacon and cheddar do mix. The commercial ends with the golfer choking Sid with his golf club. I can't find this commercial, so I'm counting on you Wreddit. FIND THIS VIDEO! I need this in my life.
Remember the story last week about the confrontation at the WWA show between Bischoff and Juventud Guerrera about a petition in WCW that Guerrera signed to have Bischoff fired? Well Dave has more details. The petition wasn't actually to get Bischoff fired, necessarily. After the incident at Bash at the Beach 2000 with Hogan, naturally, Bischoff took Hogan's side and it led to a big blow-up argument between he and Vince Russo. As a result, Bischoff pretty much walked out and said, "Here, let Russo run it and watch him hang himself." Which, of course, he inevitably did. But the point is, when Bischoff walked out, it looked as if there was going to be yet another power-change in WCW. Several of the wrestlers were fed up with their bosses changing on a monthly basis and never knowing who was in charge. So they put together a petition to give to Brad Siegel, basically asking him to give Russo a fair chance to succeed on his own and to let him remain in power in the wake of the Bischoff/Russo split. Bischoff wasn't even mentioned in the petition, it was mostly just a "don't fire Russo yet" petition. Of course, in siding with Russo to be the one in charge, that meant they were siding against Bischoff being in charge, even if that wasn't explicitly spelled out in the petition. Anyway, it apparently worked. Russo got to remain in power while Bischoff went home again. And then Russo spent the next few months booking himself to be WCW champion and screwing up everything else and within a few months, all those same guys were wishing Bischoff would come back. Anyway, a lot of people at the WWA show thought it was funny that Bischoff lashed out at Guerrera over it, because several other WCW wrestlers at the time, including Scott Steiner, also signed it.
XWF's planned house shows for later this month in Michigan and Ohio have been cancelled. Everyone has pretty much been told to sit tight for now until September and have been given hints that a TV deal is imminent. But people have been saying that since this promotion launched (yeah, this obviously never happens. Unbeknownst to anyone, XWF is already dead at this point, they never ran another show).
The plan for now (and it could always change again) is that the brand split will finally take place on the 3/25 Raw the week after Wrestlemania. It was originally supposed to be the very next night but they once again pushed it back a week, so that's where we stand for now. Promotional material for the Backlash PPV is already out and references Vince owning Raw and Flair owning Smackdown (and funny enough, it ends up going the other way) and split house shows are already scheduled for April. Dave still hates the draft idea because when guys (like Hurricane, for example) get drafted 28th, that immediately establishes them in the fans eyes as lower-card nobodies. The idea of a brand split is that it will force them to push new people and create new stars, but they've spent so long telling fans that only 3 or 4 guys matter and everyone else is minor talent. Doing a draft where guys get picked way down near the bottom just hurts them more and makes it harder to rebuild them as major players.
Notes from Smackdown: Flair had a brawl with Undertaker and during the fight, there was a "fan" played by indie wrestler Paul London who got punched. London also worked a dark match against Perry Saturn at the show. Rock returned, with not a scratch on him after being murderdeathkilled in an ambulance by the NWO a couple weeks ago. Rock challenged Hogan to face him right then and there, but of course that didn't happen because c'mon. Vince isn't crazy enough to take Hogan's first televised WWF match in 8 years and just give it away on free TV less than a week before Wrestlemania, right?
Notes from Raw: Dave calls it Raw Is Dog Shit. Oh, this should be fun. Turns out it was literally dog shit. The show was built around Triple H and Stephanie fighting for custody of their dog Lucy and at one point, it pooped on the floor. Stephanie ordered Jericho to walk the dog, because ya know, gotta build up the world champion for his Wrestlemania main event next week. The rest of the show was built around Vince and Flair in a boardroom arguing over ownership of the company with the board of directors. Jericho (while running another errand for Stephanie) accidentally runs over the dog. Riveting television here. They said the dog had a broken leg, which leads Dave to point out that Rock got practically murdered by the NWO a few weeks ago and we never got a medical update on his condition (he just sorta returned and was fine), but we found out about the dog's medical condition just minutes after it happened. As a result, Triple H came out and started attacking Stephanie, pretty much committing spousal abuse while the crowd cheered wildly, leading to Jericho attacking Triple H's quad with a sledgehammer, which would have been a fine angle if it hadn't been proceeded by weeks of making Jericho into Stephanie's whipping boy. And the main event was the 3-on-2 of the NWO vs. Austin & Rock. So yes, turns out Vince is crazy enough to book Hogan's comeback WWF match on a throwaway Raw 6 days before the biggest show of the year on PPV with no buildup whatsoever. It's the first time ever that Hogan and Austin have ever squared off against each other in a match (and it never happened again). Crowd was way into Hogan and Nash as well, since they were in his hometown.
There's a Divas special airing on UPN this week and if it does strong ratings, UPN is interested in doing a whole Divas series. Dave suspects that won't hold up long in the ratings. But for what it's worth, the original idea for Smackdown waaaaay back when it was originally conceived was for it to be an all-women's show based around Sable (who was drawing monster ratings for her segments at the time). They even held auditions for new women before scrapping the idea and making it a second show like Raw.
WWF's recent show in Japan was supposed to air on the TV-Tokyo network but it got canceled and then the network announced it was cancelling all WWF programming on the station. Turns out there was a big misunderstanding. The entire show was filmed by the network and they planned to broadcast it (with Keiji Muto doing commentary). WWF was under the impression that the show was being filmed only so they could air highlights of it as part of a sports recap show or highlight package (basically just a quick few minutes of clips on the news). WWF didn't approve for this show (a house show without all the bells and whistles) to be aired on TV in full, and when they found out, they contacted the network and said.....hey, uh, no. The network was pissed and in response, they canceled ALL WWF programming, effective immediately. This was the channel that aired Raw and Smackdown and this cancellation completely eliminates WWF's only television exposure in Japan.
Speaking of that show, before the event, Antonio Inoki told the media that he hated what WWF had become and expected the show to be a flop. He specifically talked about the Vince McMahon kiss-my-ass club angle, with Jim Ross and William Regal kissing Vince's ass and said that sort of product would never get over in Japan and thus the show would be a failure. As we learned last week, it was actually a HUGE success. In response, Inoki has admitted he was wrong and says that he has lessons he needs to learn from WWF and maybe he shouldn't have been so dismissive of their style. Dave is flabbergasted. He talks about when AAA came to the U.S. in 1993 and outdrew both WWF and WCW by a huge margin for several shows. Can you imagine if Vince McMahon had looked at that and admitted that maybe he could have learned something from it rather than ignoring it? ECW and WCW sure learned from it, and those Lucha Libre stars became a huge part of their success in later years, while WWF still hasn't learned anything from it 9 years later.
Nash and Hall are pushing hard for X-Pac to be included in the NWO and most people in the company figure it's inevitable that it will happen because Nash is pretty much undefeated in backstage political battles. He always gets what he wants somehow. Last Dave heard, X-Pac was expected to interfere at Wrestlemania in some fashion and then join the group the next night on Raw (didn't quite happen like that, but close). Lots of people in the locker room aren't happy about it because, for starters, it proves that Nash is still there to politic for his friends. And also, prior to his injury, X-Pac had fallen to a lower-card nobody status. So there's a lot of people not happy that he's expected to return and leap-frog the entire locker room and be put in the main event faction ahead of everyone else because of who his friends are.
Mick Foley signed a book deal to publish his first fiction novel, which will be titled "Tietam Brown." It's expected to be out in early 2003 and it's not about wrestling. That's all Dave seems to know so far. Foley is also now the full-time host of TNN's Robot Wars show. Foley was also involved in a TV project that was being shopped around in which he would play a former pro wrestler adjusting to real life now that he's retired. Barry Blaustein, who directed Beyond The Mat, was involved and ABC was interested, but they eventually passed and the idea seems to have died (this is basically what that new Big Show show is on Netflix. The Observer Rewind Curious Timing Effect™ strikes again.).
An idea that was pitched for Wrestlemania was for Stephanie to reveal she had been cheating on Triple H with Chris Jericho. Of course, that didn't happen. Dave talks about the Triple H/Kurt Angle storyline from a couple years ago where that almost happened but Triple H nixed it because it wouldn't be "believable" that Stephanie would cheat on him with Kurt Angle....a goddamn Olympic hero and the most legitimately bad ass athlete in the entire company. So of course, it wouldn't make sense for her to cheat on him with Jericho either. Sure, why not?
On OVW television, they hinted that Ric Flair will be coming in soon to team with his son David against Prototype and Sean O'Haire. Looks to be scheduled for next month (indeed, this does happen but for the life of me, I can't find video of it).
Another note from Eric Bischoff's interview with the Observer website, a dirt sheet website ran by a guy who he definitely never would talk to. Bischoff seems to be angling for a WWF job, saying contrary to popular belief, he wouldn't even ask for that much money to do it. He just wants to do something fun. He said they made him an offer last year, right when the Invasion angle was starting, but said he turned it down because he wasn't in good shape and didn't want to appear on TV. That's the story now. At the time, a year ago, Bischoff denied that he was ever given an offer and said he would never consider working for WWF. Dave says, in Eric's defense, the storyline they pitched last year was horrible and Bischoff was right to turn it down (they wanted him to come in and work a match with Vince at the Invasion PPV, get his ass beat, lose, and then that would be it). Adding Bischoff to the NWO angle now would be the obvious idea, but Dave says "invasion" angles never work in WWF because Vince McMahon doesn't commit to them, so adding Bischoff would likely just be another disappointment added to an already disappointing NWO return.
WWF confiscated a "Nash is horrible" sign at the TV tapings this week. Dave doesn't get it. In the past, WWF used to criticize WCW like crazy for "censoring" fans and violating their freedom of expression and all that shit. But then they started doing it too. At first, it was anti-Rock signs that were being taken away, which Dave can kinda understand because he's a top babyface. But Nash is a heel. Don't you want people bringing signs trashing them?
Scott Steiner's WWF physical showed several health issues that still need to be addressed before they sign him. The deal isn't dead yet and Steiner could still come in eventually, but that's the situation right now.
WWF has reached out to both Eddie Guerrero and Rey Mysterio and talked to them about coming in for the new cruiserweight division. Eddie has been busting his ass on the indies in hopes of getting re-hired while Rey has been working in Puerto Rico as of late.
WEDNESDAY:Fallout from Wrestlemania 18, the Hogan/Rock match, Steve Austin walks out (the first time), Vince McMahon talks about failed plan to bring Bret Hart in for Wrestlemania, and more...
Michigan regulators say they are just days away from giving launch authorization for legal online gambling and online sports betting, reports The Detroit Free Press.Even though more than a year has passed since the Legislature and Gov. Gretchen Whitmer legalized internet gambling and sports wagering in December 2019, regulators have needed time to create rules and ways to monitor and license Michigan regulators say they are just days away from giving launch authorization for legal online gambling and online sports betting. Even though more than a year has passed since the Legislature Online sports betting and online casinos are scheduled to launch in Michigan at noon on Friday. When they do, these 10 online gambling apps are authorized to launch: Barstool (sports only) BetMGM (casino & sports) BetRivers (casino & sports) DraftKings (casino & sports) FanDuel (casino & sports) Golden Nugget (casino & sports) PointsBet (sports only) The launch of the Michigan online gambling market is scheduled for Friday January 22, 2021 at noon local time, according to press release from the Michigan Gaming Control Board (MGCB) posted on Michigan.gov.. In partnership with commercial and tribal casinos in the state, online gaming providers will begin offering both online casino games and online sports betting. “The Michigan Gaming Control Board and the state’s commercial and tribal casinos will begin a new era Jan. 22 with the launch of regulated online gaming and sports betting,” Richard Kalm In partnership with commercial and tribal casinos in the state, online gaming providers will begin offering both online casino games and online sports betting. “The Michigan Gaming Control Board and the state’s commercial and tribal casinos will begin a new era Jan. 22 with the launch of regulated online gaming and sports betting,” said Richard S. Kalm, MGCB executive director. This could see sites launch in the state before the end of 2020, according to local news outlets. Like most US states with legal online gambling markets, online operators in Michigan will be tied to a partnership with a physical land-based casino operator within state lines. Dreamstime/Photographerlondon. It’s been a long thirteen months for Michigan gamblers. It was December 2019 when Gov. Gretchen Whitmer signed the state’s gambling expansion bills into law. Although retail sportsbooks launched last March, those hoping to bet or to play poker or casino games online have had to wait patiently as the Michigan Gaming Michigan Online Gambling Launch Dates & Partnerships. On December 19, 2019, a few simple strokes of the Governor’s pen signaled the end of Michigan’s multi-year pursuit of online gambling legislation, and the start of a blooming industry. Online casino games and sports betting have made their way to the Wolverine State with online poker close to The Michigan Gaming Control Board has confirmed that the state will commence with online gaming and sports betting from noon local time on Friday 22 January, with nine operators authorised to “begin a new era”. The tax and payment rate for online sports betting is 8.4 percent with igaming
Michigan launches online gaming, sports betting during ...
Online sports betting and casino games will start in Michigan at noon Friday, an expansion of options for gamblers who now wager through offshore sites. Scott Lengerman can't wait to wager money on college basketball's NCAA tournament next month."March Madness is going to be opening up a can of worms this yea... #online #poker #MichiganGreat news coming from Michigan. PokerStars launched their Michigan platform on Friday morning.Visit my blog https://realmanshow.word... New Jersey collected over $303 million in gambling tax dollars last year, due to increased online play. In Pennsylvania, it raised over $1 billion. Contessa ... Online gambling off to a good start in Michigan Michigan's new law allowing online gambling will start Friday. Residents in Michigan are anxiously awaiting the launch of online casino gambling and sports betting. In this Michigan online gambling update, Matt Schoch, l...
