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January’s market performance saw several leading companies take a hit as 888, Catena Media, and Sportradar experienced significant drops in their stock values.

888

The woes for 888 are far from over as the operator’s share price plummeted by 18.8% in January, dipping from 95.6p on 29 December to 77.6p on 31 January.

In January, the operator disclosed an 8% decline in annual revenue for the full-year 2023.

The downturn was particularly pronounced in both the UK online market and international markets, where revenue fell 8% and 16%, respectively.

“888’s continued double digit international revenue declines demonstrate how much harder it is becoming to extract value out of an increasingly complex and competitive global online regulatory environment,” Regulus Partners analyst Paul Leyland said.

“The old .com playbook of launching an indifferent one-size-fits-all offer with alternative payments and a strong VIP programme now offers more risks than rewards for visible regulated businesses without watertight operations management, in our view. 

“The obvious strategic replacement of heavy localisation to penetrate emerging mass markets is much easier said than done unless those markets are toward the beginning of a secular adoption journey.”

Meanwhile, CEO Per Widerström has spearheaded a comprehensive overhaul of the executive team at 888, alongside the implementation of a £30m savings initiative. 

Analysts agree that only time will reveal whether this fresh leadership approach will effectively harness the company’s considerable potential, thereby steering 888 towards a more prosperous trajectory.

Catena Media

Within the affiliate category, Catena Media has faced persistent challenges, notably evidenced by a 19.3% decline in its stock price in January, plummeting from SEK12.38 to SEK9.99.

Investors are surely eagerly anticipating the release of its Q4 results next week, hoping for signs of improvement amidst the downturn.

In Q3 2023, the company experienced a significant 28% year-on-year decline in revenue, which amounted to €15.9m. 

Its US revenue dropped by 29% year-on-year to €13.3m, comprising 84% of the group’s total revenue. 

Adjusted EBITDA from continuing operations also saw a steep decline, plunging by 65% year-on-year to €3.1m.

Despite these challenges, there was a glimmer of positivity in January when Vermont launched its online sports betting market.

This move followed the state’s approval for operators DraftKings, Fanatics, and FanDuel to commence operations on 11 January. 

Catena Media holds affiliation agreements with both DraftKings and FanDuel. 

Vermont, with its relatively small adult population of half a million, marks the latest addition to the New England states allowing online sports betting, serving as the first new market to launch in North America in 2024.

Catena Media’s VP for North America Ryan Harper commented: “Initial interest from both the industry and sports bettors in Vermont is strong.

“Vermonters have enjoyed online daily fantasy sports products and horse-race wagering so are no strangers to the online market.”

Sportradar

Sports data and intelligence provider Sportradar was the biggest loser among the suppliers on our watchlist.  

The stock witnessed a 6.6% decline in January, dipping from $11.05 to $10.32.

The most significant downturn occurred towards the month’s end, coinciding with Sportradar’s announcement of a major organisational restructuring and the departure of its chief financial officer and chief strategy officer. 

Between 23 January and 24 January, the stock fell by 10.4%.

This restructuring, part of the company’s previously disclosed strategic initiatives, involves the division of Sportradar into six distinct sections. 

Each division will be overseen by a C-level executive reporting directly to group CEO Carsten Koerl. 

Koerl emphasised that the objective of this shake-up is to centralise critical business functions, promoting enhanced collaboration and expedited decision-making processes. 

These measures are anticipated to drive operational efficiencies and foster increased innovation throughout the company, ultimately driving long-term growth, profitability, and shareholder value.

As part of the restructuring, Sportradar announced that chief strategy officer Ulrich Harmuth will be leaving to pursue other opportunities, while chief finance officer Gerard Griffin will be stepping down for personal reasons.

Looking back over the past six months, from 30 July to 31 January, Sportradar experienced a decline of 29.3% in its stock value.

On a brighter note, the supplier reaffirmed its outlook for 2024 in January, expecting revenue and adjusted EBITDA growth of at least 20%.

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