Casino operator 888 Holdings made its stock market debut today at a valuation of US$1.04bn in a boost to rival firms looking at listing on the London Stock Exchange.
The sector is still reeling from the fate of PartyGaming, which saw its share price drop by over a third in September following downgraded growth estimates.
But the successful listing of Gibraltar-based 888 will be viewed by many as a vote of confidence in egaming stocks.
Casino firm 32Red was forced to cancel a US$20m fundraising drive when it listed earlier this month without raising any new money.
However, in spite of adverse market conditions 888 said the 888 shares were five times oversubscribed.
And John Anderson, chief executive of 888, said he was hopeful investor confidence would return in online gambling stocks.
“The market sentiment will turn around, because the issues that caused PartyGaming's share price to drop were company specific,” Anderson said.
“There are several business models that are all different and you can’t just lump them together and compare them,” he added.
Early trading in 888 raised concerns with shares falling 3% in the first as egaming shares dropped across the board with Sportingbet down 3% and PartyGaming falling 8%.
Full trading begins on Monday, and 888's performance will be watched closely by firms such as sportsbook operator Betcorp and poker firm Excapsa that are known to be looking at a London listing.
888 becomes the second largest online gambling IPO on record, narrowly edging out Empire Online that listed at a value of US$0.93bn in June.
The firm is now expected to use its listing pursue acquisitions in the sector, with Anderson saying consolidation in the sector had arrived.
“There is going to be a lot of M&A activity and I want to be a part of that,” he said.
source : egaming review
