Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why GAN Limited's Shares Popped 24.8% in December

By Travis Hoium - Jan 8, 2021 at 12:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Online gambling continued its hot streak in December.

What happened 

Shares of GAN Limited ( GAN 0.72% ) jumped 24.8% in December, according to data provided by S&P Global Market Intelligence, as the bullishness toward online gambling stocks continued. 

So what 

Generally, stocks related to online gambling did well again in December as data from New Jersey and Pennsylvania gave a very bullish outlook on the industry's growth. But for GAN the biggest news was a public offering of 7.2 million shares for $15.50 per share. The offering was announced midmonth and raised about $111 million for the company before fees. 

Two men looking at a sports betting site on  a mobile phone with a game on in the background

Image source: Getty Images.

This is a huge stock offering for a company like GAN, but it could be the right move long term. The market is valuing companies like this very highly, and the company can now use cash or its high stock price to acquire other companies to expand its portfolio.

Now what 

I like the idea of using a high stock price to fund future growth. And after the Coolbet acquisition, we know that GAN is interested in expanding its portfolio of products. And the cash can also be used as a runway to invest in sales and other product development projects in order to grow organically. GAN is in a valuable position in the online gambling stack; it just now needs to live up to its billing as a growth stock, which could take time as online gambling in the U.S. and around the world grows. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GAN Limited Stock Quote
GAN Limited
$9.75 (0.72%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.