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  • June stock market sweep: Rivalry, Bragg and Acroud in the red
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In June, Rivalry Group, Bragg Gaming, and Acroud navigated through market challenges and strategic shifts, emerging as the biggest losers on the stock market on NEXT.io’s watchlist.

Rivalry Group

Rivalry experienced a significant 14.47% drop in its share price in June, falling to C$0.65.

This decline translated to a 49.6% drop in share value over the past 12 months.

Rivalry’s stock has never commanded high prices, with a 52-week high of C$1.90.

However, the recent downturn underscores the challenges the company faces as it attempts to solidify its position and expand its market share.

Rivalry, initially focused on esports betting, is currently attempting a strategic reset.

After expanding into iGaming in 2022, this year Rivalry revealed plans to enter the B2B space and the crypto gambling market with the introduction of the Rivalry Token, a native cryptocurrency.

CEO Steven Salz believes that cryptocurrency-based tokens can change customer and brand loyalty in gambling.

He pointed out that crypto wagers now make up 25% of global betting handle and expects this to grow.

At the end of June, the business announced it had laid off nearly 30 staff members as a result of the restructuring.

“As Rivalry continues to prioritise areas where we are finding the most customer success and return on invested capital, we have come to realise that the roles needed for our future are different from those that brought us here today,” CEO and co-founder Steven Salz told NEXT.io.

While the company’s new ambitions aim to position it as an industry leader, these ventures come with significant risks and require substantial investment and market acceptance to succeed.

The business has already shifted its profitability target from H1 2024 to the end of 2024.

To regain investor confidence and stabilise its market position, Rivalry must not only demonstrate its ability to effectively execute its strategic plans but also deliver tangible results.

Investors and industry observers will be monitoring Rivalry’s progress in the coming months to see if these efforts can stabilise and eventually boost its share price.

Bragg Gaming Group

In the supplier category, Bragg Gaming emerged as the biggest loser on the stock market, experiencing a 12.04% decline in its share price.

Bragg’s stock dropped from $6.56 on 28 May to $5.77 by the end of June.

While there was no apparent reason for the decline, Bragg’s shares have been underperforming for some time.

This persistent underperformance is one of the reasons the company launched a strategic review earlier this year.

In March, Bragg formed a special committee chaired by M&A expert Don Robertson to explore strategic alternatives, including a possible sale.

No timetable has been set for this review, but Bragg has committed to providing updates in the future.

The move follows a November 2023 letter from Jeremy Raper, CEO of Raper Capital, expressing frustration with Bragg’s low market valuation.

Raper, whose firm is the second-largest investor in Bragg, advocated for the immediate pursuit of all strategic alternatives to maximise shareholder value.

In the letter, Raper highlighted that since Bragg’s acquisition of content provider Oryx Gaming, the company’s revenue has quadrupled, and its adjusted EBITDA has increased fourteen times.

Despite these impressive metrics, Bragg’s stock price was 25% lower than before the acquisition at the time of the letter.

Raper argued that a sale would be the best course of action to deliver a substantial premium and financial certainty to shareholders.

For Q1 2024, Bragg reported a moderate 4.2% increase in revenue, reaching a record €23.8m, which could aid in finding a potential buyer or merger.

However, gross profit and adjusted EBITDA decreased to €11.4m and €3.4m, respectively.

Despite these mixed results, Bragg reiterated its full-year 2024 guidance of revenue between €102m and €109m and expects to generate full-year adjusted EBITDA between €15.2m and €18.5m.

The market will keenly await updates on the company’s future direction and potential changes in ownership structure.

Acroud

The affiliates on NEXT.io’s watchlist all struggled in June, with the exception of Gambling.com Group.

Acroud experienced the largest share decline, plummeting by 26.21% from SEK1.03 to SEK0.76.

Acroud’s stock has exhibited significant volatility recently.

Last month, amid a downturn for many affiliate businesses, Acroud emerged as a surprise winner despite recording no share gain.

This contrasted sharply with the heavy losses experienced by other affiliates.

In May, the business reported a modest 2.15% year-on-year revenue increase for Q1 2024, totalling €9.5m.

However, the company attributed much of its strong profitability in the quarter to the sale of its poker business.

Investors are certainly keeping a close watch on how Q2 unfolds.

Over the trailing 12-month period, Acroud’s stock has experienced a significant decline of 59.79%.

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