Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James & Team, View on Light & Wonder - It has been dropping prior to reporting then fell further after reporting and saying they will delist from the Nasdaq and have 1 listing on the ASX. Would you continue to hold? Thanks - sorry for the extra question - you can drop the previous question in preference to this one) Regards
Hi Debbie,
LNW plunged as much as 23% on Thursday, its biggest intra-day drop since COVID, after its revenue fell well short of expectations. Plus as you said they’ve decided to delist from the NASDAQ and focus on attracting funds from Australia’s large pool of super. It makes little difference to Las Vegas-based LNW’s business of selling poker machines and gaming software whether it is listed in the US or Australia, however the board thinks the move could be beneficial to the share price. It makes 70% of its revenue in the US, but capital is portable.
When a growth company fails to grow at the rates expected by the market, the reaction is always very negative. We also don’t like it when a company focusses on where they are listed as a reason/excuse for the share price, or an opportunity to imporve it – seems a bit of a cop out.
No doubt the impact of macroeconomic uncertainty during the quarter led to more cautious purchasing behaviour and delayed capital expenditure amongst some of its customers – this makes sense. However, their gaming businesses still sold over 9000 new units globally maintaining its market share gains. Downgrades followed the update dragging the share price along for the ride.
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