Own PointsBet shares? Here’s what the SIG investment means for shareholders

PointsBet shares are continuing south today despite news of a major new investment this week.

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An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls

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Key points

  • PointsBet recently secured a large investment from a successful trading firm
  • The market has been mute to the announcement, with PointsBet shares continuing down today
  • In the past 12 months, the PointsBet share price has sunk 80% into the red

The Pointsbet Holdings Ltd (ASX: PBH) share price is tracking lower today and is 6.5% in the red at $2.56.

Despite a slight gain over the past month of trade, the share is down 64% this year to date, or 80% in the past 12 months.

On Monday, the company advised that SIG Sports Investment Corp (SIG) made a strategic $94 million investment via a share placement.

Shares were expected to be quoted from today.

What to expect for PointsBet shares?

PointsBet advised that SIG received 38,750,000 shares for its investment at a price of $2.43 per share.

The investment upped SIG’s stake to 12.8%, making it the company’s largest shareholder.

SIG is a proprietary trading giant, with firms dotted around the world. It also has its hands in many adjacent markets like brokerage, capital management, and sports analytics.

As such, the move gives PointsBet exposure to other markets, and the pair seem to have made a long-term commitment based on the language of the directors.

PointsBet also signed a deal with Nellie Analytics, a subsidiary of SIG.

Under the agreement, Nellie Analytics will provide sports analytics and quantitative modelling services to build out PointsBet’s existing technology.

It remains to be seen what the long-term value the SIG is set to provide, but it will be recognised throughout PointsBet’s financial statements in periods to come.

On the market side, things are much clearer.

Despite the vote of confidence with these two deals, the market was relatively mute to the news.

After a small gain from $2.55 to $2.78, PointsBet shares have continued in their longer-term downtrend today.

By that, we mean the shares have rolled from a previous high of $13 on 24 June last year to just above $2.50 today.

The PointsBet share price hasn’t managed to break away from the selling pressure, as seen below.

TradingView Chart

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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