Why GAN Limited Stock jumped up to 10% in morning trading today

What happened

Actions of GAN Limited (GAN 0.00% ), which provides software services to the casino industry, rose rapidly 10% in morning trading on December 1. Two company news items likely helped spur this lead, but one is probably more important than the other from a business perspective.

So what

After the market closed on November 30, GAN announced that it was launching a $ 5 million share buyback program. Investors generally like share buybacks because reducing the number of shares allows the company to spread its profits over fewer shares. This has the effect of increasing income, although it does not really help grow the business. This announcement, in addition to the broader market rally after a big day of falling indices on November 30, was probably what excited investors.

Image source: Getty Images.

However, this morning, GAN announced that it has just released a new set of Michigan casino games in conjunction with Churchill Downs. The news actually relates to a May deal between GAN and Ainsworth Game Technology, in which GAN was granted the exclusive right to more than 70 online casino games from Ainsworth (with more in the works). Essentially, GAN strengthens the product it can offer its customers as they look to grow their internet business or simply improve the web offering they currently have in place. This should help GAN to win and keep business for the long haul. Churchill Downs was the first content launch for GAN, making it an important test case.

Now what

While it’s hard to decipher which update had the most impact on GAN’s share price today, the launch of the new product is clearly the most important to the company’s business. And while share buybacks are nice to see and often lead to rapid increases in share prices, when the company releases its next quarterly earnings, investors should probably pay close attention to the update on the launch of the. Ainsworth game.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


Source link

Comments are closed.