Golden Nugget Online Gambling (GNOG) stock is on a tear in 2020 with a 150% gain for the year as of December 29.
But the thing is, if you are joining the party now, during GNOG IPO day, you might be late to the party. At least for now. Because GNOG stock was already trading for the last 6 months, under a different ticker (LCA) and under a different name, Landcadia Holdings II. During a special LCA shareholders meeting on December 29, merger with Golden Nugget was approved, which completed previously announced transaction.
Landcadia Holdings II (NASDAQ:LCA) was a blank check company (SPAC), designed to raise money through an IPO for the purpose of acquiring an existing company, in this case Golden Nugget.
LCA stock closed the last trading day with a light loss (-2.86%) but it is expected that this fast-growing gambling company will get new energy once the ticker is changed to GNOG, which is today.
The transaction values the combined company at an anticipated pro forma enterprise value of approximately $745m, or 6.1x GNOG’s estimated 2021 revenue of $122m.source
Tilman J. Fertitta, Company’s CEO and Chairman of the Board, commented on this deal, “I am pleased to see the business combination finally close. We see tremendous opportunity in the online gaming space and are excited to be a part of it.”
So, is GNOG stock a buy now amid its merger and IPO day?
The gambling company is banking on its name and skyrocketing gross gaming revenues in 2020, which increased 93% in the 3rd quarter, compared to same period in 2019.
“We are very pleased with yet another quarter of profitable growth. Our pandemic-proof business model keeps showing its resilience in New Jersey and we look forward to expanding operations in Michigan.” said Tilman J. Fertitta, GNOG’s owner back in October.
GNOG stock is a buy right now.
Shares are now decidedly above their $20.00 buy point. New investors are advised to wait and see if there will be a selloff during IPO day. Holders are advised to either sell on news if they entered during early LCA days or to hold if they bought around $20. Also, have in mind that this is the end of a year and things can get volatile pretty fast, so staying away from the screen might be the best option for both holders and new investors.
The company has managed to put together three quarters of double-digit revenue growth. That’s expected to continue in the future with 4th quarter report in January. Furthermore, in Q1 2021, Golden Nugget is expected to be solidly profitable.
It will be important to watch Golden Nugget’s efforts to distribute its gambling licences beyond New Jersey. That could help incite both GNOG stock and the gambling company’s financials.