Why is the PointsBet share price storming 13% higher today?

The PointsBet Holdings Ltd (ASX: PBH) share price has been a very strong performer on Thursday.

At the time of writing, the sports betting company's shares are up 13% to $2.73.

This means the PointsBet share price is now up 35% over the last two weeks.

Why is the PointsBet share price racing higher?

Investors have been bidding the PointsBet share price higher today despite there being no news out of the company.

Though, it is worth remembering that there has been some very promising news out of PointsBet this month, which could be supporting its shares.

That news was SIG Sports Investment Corp (SIG) investing $94.16 million into the company via a placement of shares at a significant premium to the PointsBet share price at the time.

SIG co-founder and managing director Jeff Yass commented: "After several years of thoroughly evaluating the North American sports betting market for the right partner, SIG Sports is pleased to have made what we consider to be a long-term investment in PointsBet."

This purchase meant SIG became PointsBet's largest shareholder with a 12.8% stake.

The response

The response to this investment was positive in the broker community.

For example, Goldman Sachs, which has a buy rating and $5.78 price target, said:

We see strategic merit in today's events for PBH given the addition of a long-term strategic investor (with voluntary lock up period) to its register and the potential operating upside from further widening its margin/tech gap to peers through its partnership with [SIG's] Nellie Analytics.

Elsewhere, Bell Potter, which has a speculative buy rating and $5.25 price target, highlights the boost this has given to the company's balance sheet. It said:

The other key change, of course, is the cash which we now forecast to be around $445m and $175m at the end of FY22 and FY23 (both net of around $50m in player cash accounts). This suggests the company has sufficient cash for at least another year and then has the ability to raise funds in FY24 through the deferred bonus equity options if necessary.