David Einhorn Buys 3.96 Million Shares in Amaya Inc.September 6, 2016 11:33 am
Greenlight Capital CEO David Einhorn has a proclivity for poker, with the 47 year-old hedge fund manager having won $5,152,863 playing in the World Series of Poker in Las Vegas. Of course, the billionaire promptly donated all his winnings to charity, which would be far beyond the expectations or capabilities of any professional player in the game today.
Last month, Einhorn’s latest poker adventure then saw him purchase roughly 3.96 million shares in Amaya Gaming Inc worth around $60 million. However, Einhorn’s investment in the company which owns the world’s biggest poker site, PokerStars, has nothing to do with philanthropy and everything to do with the investment guru spotting a potentially huge profit in a company he obviously believes to be undervalued.
Nevertheless, it is not just PokerStars’ dominance in the online poker industry which appears to have caught Einhorn’s eye, but also the potential of using the brand to expand into other verticals, such as online casino, sportsbook, and Daily Fantasy Sports (DFS). Amaya already offers these products as part of its gambling mix, with its DFS products BetStars and StarsDraft of particular interest to Einhorn given the continuing surge in popularity of the game.
While just 3 US states have adopted iPoker regulation since 2013, there are already 8 US states with legalized fantasy sports markets in the country. That number expected to mount in the coming years, which together with other developments in the iGaming industry, will only see Amaya’s share price climb in the future. Providing his analysis on what would make Einhorn’s investment pay off handsomely in the future,Bram de Haas of Gurufocus.com laid out three main factors:
“One, all U. S. states (have to) adopt clear poker regulations that at least allow Amaya into the market. Two, the U. S. (has to) arrive at a clear regulatory stance towards DFS; and three, the Sportsbook’s expansion has to continue.”
Given Einhorn’s track record for picking winners, his latest investment in Amaya is certain to attract a great deal of interest from speculators.