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Why Accel Entertainment Gained 8% Today

By Howard Smith – Sep 24, 2020 at 1:38PM

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The slot-machine maker announced the pricing for a public stock offering.

What happened

Shares of video-gaming machine supplier Accel Entertainment (ACEL 2.52%) rose 13% this morning before settling to a gain of 8%, as of 1:00 p.m. EDT. 

So what

After announcing a common stock offering earlier this week, investors had driven the stock down 25%. Today, the company announced the shares would be offered at a price of $10.50 per share, just about where shares closed yesterday's trading session. Investors were satisfied and cut some of the losses seen earlier in the week. 

Casino video slot machines.

Image source: Getty Images.

The supplier of video-gaming terminals to Illinois casinos announced a partnership with sports-betting company DraftKings (DKNG 3.42%) earlier this month, giving investors other positive news to consider. 

Now what

Accel is selling eight-million shares, bringing in $84 million the company plans to use for general corporate purposes. The offering is expected to close early next week. 

The company had a difficult second quarter ending June 30, 2020, as the Illinois Gaming Board shut down all video-gaming terminals on March 16 due to the COVID-19 pandemic. Video gaming restarted in July with additional safety protocols, including dividers and more spacing between games. Accel said that within three days, 90% of its games were back operating.

Despite the impacts from the pandemic, Accel has added 33% more locations compared to the year-ago period and has 37% more gaming machines. It also now has an exclusive agreement where DraftKings will compensate Accel to promote its sports-betting content on Accel gaming machines. Analysts believe the deal will increase traffic and revenue for Accel. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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