Tilman Fertitta is excited about DraftKings and Wynn Stocks

Posted on: December 22, 2023, 4:33 am.

Last updated on: December 22, 2023, 5:16 am.

Tilman Fertitta controls the growing Golden Nugget casino empire, but is bullish on two more gaming stocks heading into 2024.

Fertitta Commanders
Tilman Fertitta in a 2020 interview. He is bullish on DraftKings and Wynn Resorts stocks. (Picture: CNBC)

In an interview with CNBC’s Brian Sullivan and Fertitta were bullish on DraftKings (NASDAQ: DKNG) and Wynn Resorts (NASDAQ: WYNN) – two stocks in which he is one of the largest individual investors.

I think Wynn is still your leading gaming company in the United States,” Fertitta said in the interview. “If there is business in Vegas, as there always has been, Wynn will do the most business.”

On October 31, 2022, it was announced that the Golden Nugget boss and owner of the Houston Rockets had acquired a 6.1% stake in Wynn, making him the second largest individual shareholder in the stock after Elaine Wynn. This sparked speculation that Fertitta could eventually take over Wynn completely. Such a transaction has not yet materialized, but his desire to own a casino resort on the Las Vegas Strip is well documented.

Wynn could be the winner for Fertitta

A 2022 Schedule 13G filing with the Securities and Exchange Commission (SEC) shows that Fertitta Entertainment, Fertitta itself and another company purchased 6.91 million shares of Wynn in October 2022.

Depending on exactly when in October 2022 these purchases were made, Fertitta will likely be sitting on a modest, if unrealized, gain on Wynn shares. The stock closed at $87.21 on October 1, 2022 and at $90.42 today. Although this suggests lethargic price performance for the name over the past year, Fertitta remains optimistic in his outlook for Wynn.

“I’m very optimistic about Wynn,” Fertitta added. “It has been in the 80s there for the last few months and I expect it will take a big step soon.”

According to SEC filing activity, Fertitta has neither increased nor reduced his stake in Wynn.

Fertitta is also positive on DraftKings

Fertitta told Sullivan that he is the largest individual shareholder in DraftKings equity, although that likely refers to the common stock since co-founder and CEO Jason Robins owns more than 90% of another class of stock that has super voting rights.

Fertitta’s status as a major investor in DraftKings came about through the online sportsbook’s acquisition of its Golden Nugget Online Gaming (GNOG) – an all-stock deal valued at $1.56 billion that closed in May 2022. This transaction paved the way for DraftKings to become one of the market share leaders in the domestic iGaming industry due to GNOG’s established internet casino presence in major markets such as New Jersey.

He remains bullish on DraftKings even as new competitors like ESPN Bet and Fanatics enter the arena.

“It’s really going to be four or five companies that are going to dominate the sports betting industry,” Fertitta told Sullivan. “You have to remember that this industry only exists in a few states. It’s not in California. It’s not in Texas. So many people are now betting on offshore activity that when these big states get it, the amount of money that goes to these companies’ bottom line is extremely, extremely large.”

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