Why Scientific Games Corp (NASDAQ: SGMS) Stock Is Soaring

Free $100 Forex No-Deposit Bonus

Scientific Games Corp (NASDAQ: SGMS) stock soared over 39.33% on September 14th, 2020 (Source: Google finance) after the company announced that a number of long-term institutional investors, including highly credentialed gaming industry investor Caledonia, have signed an agreement for acquisition of a 34.9% stake in Scientific Games from MacAndrews & Forbes Incorporated at a price of $28.00 per share. In connection with the deal, SGMS is implementing a series of governance changes and enhancements, including refreshment of its Board of Directors and termination of the Stockholders Agreement with MacAndrews & Forbes, to reflect its new investor base and continue to position the Company for growth and value creation. The company’s board to be reconstituted, for including all existing directors, other than the MacAndrews & Forbes representatives, as well as three new directors. The Board will comprise a majority of independent directors with a deep and diverse mix of gaming industry, financial, strategic and operational experience. In a new board, Jamie Odell will be joining as executive chair and Toni Korsanos as executive vice chair.

Moreover, the initial strategy is to implement transformative strategies for the optimization of the business portfolio and shareholder value, which could result in selling parts of the business. The company will also accelerate efforts to reduce its debt. This is another sign that asset sales may be part of the strategy. Internally, the company intends to focus on digital gaming and sports-betting opportunities. Further, as gaming industry revenues continue to recover, the company could benefit from a renewed wave of growth due to the position at the forefront of the rapidly expanding digital gaming and sports betting ecosystem and the vast portfolio of original content and licensed brands.

Additionally, the transaction between the investing parties and MacAndrews & Forbes is projected to be executed in multiple tranches after which no investor is expected to beneficially own more than 9.9% of the outstanding shares of Scientific Games. The first tranche sale is expected to be completed on Monday and the transaction is anticipated to be fully completed over the next several weeks. The changes to the SGMS Board become effective after the first tranche sale.

On the other hand, for fiscal 2020, the Company now expects that capital expenditures will be in the range of $210-240 million. The company continues to expect capital expenditures for 2020 as a whole to be in the range of $210-240 million. SGMS currently expect to be free cash flow positive for the full year 2020.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.