The price of shares pertaining to Bragg Gaming witnessed an exponential increase following a suggestion by an investor for an outright sale. The advice came from Jeremy Raper, who is the founder of Raper Capital and under whose supervision are the companies or individuals possessing 375,000 shares of Bragg Gaming.
According to the latest casino news, The proposal was submitted to Matevz Mazij, the Chairman and CEO of Bragg Gaming, for his consideration. The rationale given was the insufficient interest generated by the company since its initial public offering on the Nasdaq in August 2021.
Additionally, Raper stated that the markets are apprehensive regarding the future of the company’s shares and matters that the shareholders would deem unproductive based on a close examination of the company’s current situation. Trading at $5.55 per share despite a 44.55% increase in value. This appears to be an abjectly dismal amount compared to the $25 it reached in 2021. Since the sale recommendation, the volume of the securities has increased by 21%, surpassing the daily average by more than 13 times.
The observation of Bragg Gaming’s management-level executives is that stock prices are, in fact, failing to achieve adequate valuation in public markets. Without substantiating evidence that Bragg Gaming is experiencing an upswing in the public market, the competition continues to trade and transact at significantly higher multiples. Therefore, the company declared that it would conduct a strategic review.
At that point in time, no consideration was mentioned of the possibility of a sale, and that remains to date. In Raper’s opinion, if the company agrees to sell itself, it would come in for a massive premium and also gain the trust of investors where its value is concerned.
In his proposal, Raper proposed that the management team could only anticipate a satisfactory return on the present value attained thus far through an intermediary sale of the company. Raper strongly believed that the majority of the minor shareholders would welcome this course of action as a means to escape the current situation. Bragg’s significant attention is poised to be garnered due to the current upward trajectory observed in the sports wagering industry.
From August 2022 onwards, the market has witnessed approximately seven takeovers pertaining to B2B and B2C iGaming organizations that took place at an average business value in the case of earnings prior to taxation, interest, depreciation, and amortization ratio of 15x.
As per Raper’s understanding, Bragg is carrying out trading for simply 5.5x EBITDA. Yet, considering a multiple of 12x, the company’s worth would be $13.50, or at least twice the present price. It is another matter if the buyer accepts this, but in the eyes of the investor, this makes economic sense.
It is not to be denied that Bragg has been responsible for higher market rates in terms of growth, which has been mainly organic and comes with excellent IP content, which would immediately pull in buyers.