Playtika Pounded by Short Report, Expert Sees Things Differently
Shares of Playtika (NASDAQ:PLTK) plunged Thursday after a search loyal issued a unawares report on the mobile gaming company. But at to the lowest degree I manufacture observer believes the analysis is inaccurate.
Playtika slid 8.53 percent on intensity that was three-base hit the day-after-day average. That’s after Grizzly Research issued a scathing study inwards which it claims the gaming keep company is sitting on a mountain of debt and that it faces mounting regulatory risk.
The research truehearted adds that following Playtika’s January 2021 initial public offering (IPO), the company was “stripped of its cash” and loaded upwardly with debt, adding that Playtika is essentially the only roving gaming accompany with a massive debt burden.
Additionally, the initial public offering did non call down much proceeds for the company, but instead allowed former shareholders to unlade their shares to the public,” says Grizzly.
Playtika’s IPO was comprised of 69.50 jillion shares. The society offered 18.51 zillion and 50.98 gazillion sold by Playtika Holding UK. That entity is controlled by Chinese investors that purchased the gaming accompany in 2016 for $4.4 billion.
Another Dodgy Chinese Firm?
As to a greater extent Chinese companies have gone public, pursuing listings inwards the US, many make become targets of little sellers alleging financial dupery 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 past Chinese investors Giant Network Group Co. Ltd. and Yunfeng Capital. Yunfeng is a buck private equity group started by Alibaba father Jack Ma.
There could live something to Grizzly’s assertion that Chinese investors are looking for to offload their shares onto ordinary shareholders. That’s because Playtika revealed last-place calendar week PHUK II is planning a sizable stock sale that could amount to as often as 25 percent of the gaming company’s shares outstanding.
“Playtika, in our opinion, is a quintessential illustration of a pattern we ofttimes check inwards today’s market environment,” adds Grizzly. “Chinese insiders seem keen to wreak their companies public inwards the US when faced with regulatory changes which essentially destroy their business.”
The explore steadfastly adds 20 percent of Playtika shares are pledged to Chinese banks by inside investors from that country, which is secret from US investors while creating to a greater extent risk of exposure for other shareholders.
Grizzly Wrong About Playtika, Says Expert
Short reports often lot claims that the information presented inwards the search isn’t accurate, and the case of Playtika is no more different.
“I’ve through with(p) a lot of search on Playtika o'er past 10-years… 99 percent of the items in this news report are wrong, misconstrued, and or misleading,” said Eilers & Krejcik Gaming partner ecstasy Krejcik in a twirp earliest today.
Krejcik didn’t luxuriant on wherefore Grizzly’s analysis of Playtika is inaccurate.
“In summary, we believe Playtika’s short-termism comes at the disbursal of lasting shareholder and business sector value. Looming regulatory risks and an aggressive monetization strategy make believe the stage business unsustainable. We see o'er 40 percent downside inward the inventory inward the unforesightful to medium term,” concludes Grizzly.
The caudex closed at $15.54 today and is 55.71 percent infra its 52-week high.