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  • April stock market sweep: Sportradar and Raketech shares slump
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PointsBet, Sportradar, and Raketech all faced substantial decreases in their stock values throughout April.

April proved to be a challenging period for global stock markets, and the gambling industry felt the pinch too.

The major indices experienced a particularly rough ride, with the Dow enduring a 5% decline, marking its most significant monthly setback since September 2022.

The S&P 500 followed suit, sliding approximately 4.2%, while the Nasdaq saw a 4.4% dip.

Only a select few companies on NEXT.io’s watchlist managed to deliver gains in their share prices.

Conversely, the majority of operators, suppliers, and affiliates found themselves in negative territory.

PointsBet

PointsBet emerged as the number one casualty in the operator category.

During the month, the operator’s shares took a sharp nosedive, plummeting by 37.8%, with the most substantial drop occurring on 29 April.

However, PointsBet’s downturn may surprisingly hold promise for shareholders.

Despite the apparent cause for concern, this decline wasn’t triggered by any negative trading updates or broker downgrades.

Instead, it was driven by a strategic move.

When presenting its latest financial results in April, PointsBet announced a A$127m capital return to shareholders, working out at A$0.39 per share.

The announcement set off a flurry of activity, with 29 April marking the final day for trading shares entitled to participate in the capital return.

Essentially, this cutoff date locked in the rights and ensured that new investors would not be entitled to benefit from the return upon purchasing shares.

Consequently, the share price adjusted downward to reflect this change. It’s a rational market response, as investors wouldn’t want to pay for benefits they won’t receive.

The capital return payment will be sent to shareholders on 16 May.

Sportradar Group

Sportradar experienced a significant setback in April, earning the title of the biggest loser among the suppliers on our watchlist, with a 19.93% drop in its share value.

This decline came as a sharp contrast to its performance in the previous month, where it emerged as one of the best-performing stocks in the supplier category.

In March, Sportradar witnessed a 19.95% surge in its share price, soaring from $9.72 on 29 February to $11.64 on 28 March.

However, the optimism surrounding the company quickly dissipated as its shares plummeted to $9.32 by 30 April, thus erasing all the gains made in the previous month.

Unlike a singular event to pinpoint as the cause, Sportradar’s decline seemed to unfold gradually throughout the month.

The company’s latest earnings results, released in March, initially propelled its shares up.  

The shares managed to maintain stability for a brief period, reaching a monthly peak of $11.62 on 8 April.

On 9 April, Morgan Stanley raised its price objective for the stock from $11 to $11.50 and gave Sportradar an “equal weight” rating in a research report.

Despite positive analyst opinions, the stock trajectory abruptly shifted downward in the latter half of April.

However, over the trailing 12 months, Sportradar’s shares were up around 5.5%.

Raketech

In the affiliate category, Raketech registered the greatest stock market loss in April, with a decline of 19.12%.

The affiliate business has witnessed a continuous decline in its share price trajectory since the onset of 2024.

This downward trend coincides with significant changes within the company’s leadership structure as Oskar Mühlbach stepped down as CEO in January.

At the time, the affiliate said its board of directors and Mühlbach had mutually agreed on the split due to different perspectives on the strategic direction of the company.

In response to Mühlbach’s resignation, Raketech appointed co-founder and former board member Johan Svensson as acting CEO.

As of now, Svensson continues to occupy that position, and the lingering uncertainty regarding the transition in the CEO role might have impacted investors’ sentiments throughout April.

Moreover, the downward spiral continued into May when the company issued a trading update, revising its guidance for full-year 2024.

Raketech’s share value plummeted to SEK11.40 on 2 May, marking its lowest point in the past two years.

For Q1 2024, Raketech said it anticipates revenues to reach €19m, up from €16m in Q1 2023.

However, adjusted EBITDA for the same period is expected to come in at €5.1m, down from €6.1m in Q1 2023.

In light of current trading conditions, including its performance in April, Raketech stated it now forecasts adjusted EBITDA of approximately €20m for the entire year.

The affiliate previously guided towards adjusted EBITDA between €24m and €26m.

Raketech said the revision in guidance stems partly from the impact of a significant Google core update during the quarter, which particularly affected the company’s Casumba assets.

The business also stated efficiency measures were implemented to enhance execution capabilities, focus on priority products and markets, and optimise cash flow.

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