What happened
Shares of GAN Limited (GAN -0.81%), which provides software services to the casino sector, rose a quick 10% in morning trading on Dec. 1. There were two pieces of news out of the company that probably helped spur that advance, but one is likely to be more important than the other from a business perspective.
So what
After the close of trading on Nov. 30, GAN announced that it was initiating a $5 million share repurchase program. Investors generally like to see stock buybacks, since reducing the share count allows the company to spread its earning over fewer shares. That has the effect of boosting earnings, though it does little to actually build the business. This announcement, in addition to the broader market rally after a big down day for the indexes on Nov. 30, was probably what got investors excited.
Image source: Getty Images.
However, this morning, GAN announced that it has just released a new set of casino games in Michigan in conjunction with Churchill Downs. The news actually relates back to a May agreement between GAN and Ainsworth Game Technology, in which GAN was granted the exclusive right to Ainsworth's 70-plus online casino games (with more in the works). Essentially, GAN is bolstering the product it can offer to its customers as they look to either expand their business onto the internet or simply enhance the web offering they currently have in place. That should help GAN win and retain business over the long term. Churchill Downs was the first launch of the content for GAN, making it an important test case.
Now what
While it's hard to decipher which news update had the bigger impact on GAN's stock price today, the new product launch is clearly the more important one for the company's business. And while stock buybacks are nice to see, and often lead to quick stock price advances, when the company reports its next quarterly earnings investors should probably pay close attention to the update on the Ainsworth game launch.
