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Why is the Betmakers (ASX: BET) share price down 5.4%?

Red arrow downward chart

Gambling operator Betmakers Technology Group Ltd (ASX: BET) saw its share price tumble 5.41% on Wednesday.

There was no meaningful official announcement from the company that could have directly swayed the stock price. However, a $75 million capital raise was executed on Wednesday, meaning some stock dilution did take place.

Last week the stock soared on news that racing industry identity Matt Tripp has bought into the company with $25 million of newly created shares. Other institutional investors put in a further $50 million.

Tripp was also appointed strategic advisor for Betmakers. “I am delighted to invest into the company and take on a role to assist in growing the business at scale globally,” he said at the time.

“BetMakers has cemented itself with a compelling proposition in the global racing wagering market. They have built a formidable team with a highly trusted brand and established a global footprint with a large customer base.”

Betmakers investors cashing in profits?

Betmakers shares have gone gangbusters in the past 4 months. At the start of November, it was trading at 40 cents. It spiked up to as high as $1.08 last week.

The Betmakers share price has since deflated to 88 cents after just 4 trading days. This could’ve been the result of some profit-taking ahead of the company’s half-year results.

In December, the Newcastle business pulled off the acquisition of multinational sports betting provider Sportech PLC for $56.2 million.

Betmakers managing director, Todd Buckingham, said at the time the deal would “supercharge” its growth in the United States.

The acquisition would give us a meaningful presence in the US, including in 36 of the states and across more than 200 venues, 25 digital outlets and 9,000 betting terminals. 

It will also greatly expand our global customer base across the UK, Europe and Asia and provides us with an opportunity to expand our product offering at scale in these and other regions.

Betmakers was founded in 2013. The company now has branches in Brisbane, Melbourne and Colombo, Sri Lanka.

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Returns as of 15th February 2021

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