Bragg Gaming Soars as Investor Pushes for Sale
Shares of Braxton Bragg Gaming (NASDAQ: BRAG) soared Wed after an investor pushed the accompany to take strategical alternatives, including a possible sale.
Raper Capital father Jeremy Raper, who oversees entities managing 375K shares of the gaming company, penned a missive to Bragg CEO and Chairman Matevz Mazij, noting Braxton Bragg has been a “chronic” laggard since its much-ballyhooed August 2021 debut on the Nasdaq.
Suffice to say, the public markets feature had plentitude of chance to appraise our Company’s growth story, o'er time, and yet the enter demonstrates that it will not, or cannot, conformity fifty-fifty the take down bounds of what to the highest degree shareholders would turn over fair value,” Raper noted to Mazij.
Bragg provides cyberspace casino and sportsbook engineering services to gaming operators via its ORYX Gaming brand. The shares are up 44.55% year to date, but trade at $5.55 at this writing, swell off the 2021 high-pitched around $25. In belatedly trading Wednesday, the buy in is upward 21% on volume that’s more than 13x the day-to-day average.
Sale Could Bring ‘Certainty of Value’
Bragg management has long been aware that the buy in has struggled to make headway decent valuation in public markets.
“While peers go on to trade in and transact at significantly higher multiples, Bragg’s continued strong growing has in time to be reflected in the Company’s public market place performance,” the keep company said inwards a 2021 financial statement announcing a strategical review.
That promulgation didn’t cite a possible sales agreement and, prior to today, no such intelligence had materialized. Raper believes that should Bragg sell itself, it would trance a “gargantuan premium” spell gaining “certainty of value” for investors.
“As such, it is evidently decipherable that a third-party sale of the byplay is the only right smart to crystallize a right paying back for the underlying business concern time value that you, and legacy management, feature created,” he wrote. “I believe to the highest degree all other minority shareholders would not only living this initiative, but so concur with my contention that such an initiative is the last, best course of action usable to the Company.”
The investor believes there would follow plenteous involvement in Bragg and in that location may be something to that whimsey because analysts widely believe iGaming and sports betting consolidation to hot up up, specially on the technology front.
Template for Bragg Sale
Since Aug 2022, on that point get been at to the lowest degree seven acquisitions of business-to-business (B2B) or business-to-consumer (B2C) iGaming companies that occurred at an norm endeavour economic value to earnings before interest, taxes, depreciation, and amortisation ratio of 15x.
As Raper noted, Braxton Bragg trades for simply 5.5x EV/EBITDA. But fifty-fifty at a multiple of 12x, the troupe could follow worth $13.50, or to a greater extent than three-fold current prices. Whether or non a purchaser will make up that a great deal remains to follow seen, but the investor sees “irrefutable economical logic” for Braxton Bragg to sell itself.
“After all, Braxton Bragg has demonstrated well-above market rates of growth, largely organic, and is progressively inwards possession of unique and lasting 1P cognitive content that a figure of other parties — whether tier up 1 B2C operators, or other B2B providers — would erotic love to have outright,” concluded Raper.
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