Playtika Pounded by Short Report, Expert Sees Things Differently
Shares of Playtika (NASDAQ:PLTK) plunged Thursday after a explore truehearted issued a little write up on the roving gaming company. But at least ace industry observer believes the analysis is inaccurate.
Playtika slid 8.53 percent on loudness that was three-bagger the day-by-day average. That’s after Grizzly Research issued a vituperative cover inward which it claims the gaming company is posing on a mount of debt and that it faces mounting regulatory risk.
The search unwavering adds that next Playtika’s January 2021 initial public offering (IPO), the companion was “stripped of its cash” and loaded upward with debt, adding that Playtika is essentially the only if nomadic gaming troupe with a monumental debt burden.
Additionally, the initial public offering did non conjure up often proceeds for the company, but instead allowed former shareholders to offload their shares to the public,” says Grizzly.
Playtika’s IPO was comprised of 69.50 jillion shares. The troupe offered 18.51 trillion and 50.98 million sold by Playtika Holding UK. That entity is controlled by Chinese investors that purchased the gaming companion in 2016 for $4.4 billion.
Another Dodgy Chinese Firm?
As more Chinese companies hold gone public, pursuing listings inwards the US, many have got turn targets of shortsighted sellers alleging financial fraudulence and dubious accounting practices, among other claims.
For its part, Playtika is an Israeli company. But its largest investor is Playtika Holding UK II Limited (PHUK II), which is controlled by Chinese investors Giant Network Group Co. Ltd. and Yunfeng Capital. Yunfeng is a common soldier equity mathematical group started by Alibaba beginner Jack Ma.
There could live something to Grizzly’s assertion that Chinese investors are looking to unload their shares onto ordinary bicycle shareholders. That’s because Playtika revealed last-place calendar week PHUK II is provision a sizable gillyflower sale that could amount to as often as 25 percent of the gaming company’s shares outstanding.
“Playtika, inwards our opinion, is a quintessential illustration of a pattern we often check in today’s market place environment,” adds Grizzly. “Chinese insiders seem keen to fetch their companies public in the US when faced with regulatory changes which essentially put down their business.”
The search unfluctuating adds 20 percent of Playtika shares are pledged to Chinese banks past privileged investors from that country, which is secret from US investors piece creating to a greater extent risk of infection for other shareholders.
Grizzly Wrong About Playtika, Says Expert
Short reports often get out claims that the info presented inwards the explore isn’t accurate, and the typesetter's case of Playtika is no more different.
“I’ve through with(p) a lot of research on Playtika over past 10-years… 99 percent of the items in this write up are wrong, misconstrued, and or misleading,” said Eilers & Krejcik Gaming partner Adam Krejcik inwards a tweet earliest today.
Krejcik didn’t flesh out on why Grizzly’s analytic thinking of Playtika is inaccurate.
“In summary, we trust Playtika’s short-termism comes at the disbursal of lasting shareholder and business concern value. Looming regulatory risks and an fast-growing(a) monetization strategy pretend the concern unsustainable. We ascertain o'er 40 percent downside inward the stock inward the unforesightful to mass medium term,” concludes Grizzly.
The stock up closed in(p) at $15.54 today and is 55.71 percent to a lower place its 52-week high.
This news is curated to you by the 918Kiss Singapore.