Amaya stock performance on both the Toronto and Nasdaq exchanges has shown investors aren’t concerned with an ongoing probe.
Despite the company being investigated by Quebec securities officials into allegations of illegal insider trading leading up to its $4.9 billion acquisition of PokerStars and Full Tilt, stock prices have continued to go up.
David Baazov, CEO of Amaya, said at the company’s annual meeting that the investigation “has seen no effect on the day-to-day operations.”
And shareholders seem confident that the man in charge is the right guy for the job, overwhelmingly approving his reelection as chairman of the board 99.57 percent in favor to just 0.43 percent opposed.
In addition to Baazov, five others were elected to one-year terms on the board, most notably General Wesley Clark, the retired General of the United States Army and former presidential candidate. Clark has been taken to task in some circles for some of his business alliances in the past, but apparently still holds enough prestige among investors to cause no concern for Amaya.
Canada’s Autorite des Marches Financiers (AMF), the financial market regulator in Quebec, is looking into whether Amaya executives and outside corporate clients made stock purchases in Amaya with special knowledge of an impending deal to takeover PokerStars and Full Tilt brands and the two network’s 93 million global customers.
“It’s not something to be taken lightly, but it’s not Hollywood either,” Baazov said. “It’s not taking away from the mental real-estate of the executive team, the staff, the organization, etc.”
The stock price of Amaya nearly doubled in less than a month before the purchase, as speculation mounted and investors drove up the price, but the ongoing AMF inquiry hasn’t slowed its climb. In fact, the stock is hotter than ever.
Amaya started trading on Nasdaq on June 8th, part of a dual listing along with its place on the Toronto Stock Exchange. After closing its first day at $25.99, the stock has jumped to over $29.50 during the last 15 days, an increase of more than 13.5 percent.
Investors are likely speculating that Amaya’s financial expansion will only grow should more states in America move to legalize online gambling and ultimately welcome back the PokerStars and Full Tilt Internet card rooms. And Baazov himself is saying all the right things to entice new capitalists and retain current shareholders.
“We believe we are a tech company at heart,” the CEO and chairman said. “Where we plan to go with this is not just gaming.”
That next step might come by way of bwin.party, the iGaming company Amaya has placed a US$1.69 billion bid for along with GVC Holdings. Bwin.party is the parent company to not only partypoker, the world’s third largest online poker room and currently licensed in New Jersey, but also the bwin sports betting platform, the core business component for the corporation.
Amaya’s long-term goal is to double its online poker player base in the next five years, but its more immediate focus is expanding into other online businesses.
“We’re excited about leveraging technology in order to acquire more consumers… to give them what they want,” Baazov concluded.