Social Gaming Operator DoubleDown Moves Into Real-Money Gambling
Social gaming is a great form of entertainment for people around the world, and there have been a number of successful platforms focused solely on the segment. DoubleDown Interactive was one of these, but is now moving into the real-money gambling space.
DoubleDown is expanding into real-money gaming with the acquisition of Swedish online casino business SuprNation. The $35-million deal will give it a strong foothold in the growing iGaming market and further solidify its position as a leading player in the online gambling ecosystem.
The company has been a major player in the social gaming space for many years, and this move into real-money gaming is a natural extension of its business. It will continue to offer its free-to-play model, but will open its operations to additional possibilities.
Online Gambling Continues to Attract New Players
The arrangement will see South Korea-based DoubleDown, which began in 2010 as a Facebook casino, spend $35 million to acquire SuprNation. It’s an all-cash, debt-free arrangement, but still has to pass a successful financial review.
If DoubleDown likes what it finds in that review, it will move forward with its plans. It’s optimistic that it will be able to complete the acquisition sometime during the second quarter of this year, as long as it can also secure all necessary regulatory approvals.
CEO Keuk Kim announced the purchase, adding that it’s a smart move for the company to be able to expand in Europe. He didn’t elaborate on what DoubleDown’s plans will be beyond that.
SuprNation is behind several online brands, including VoodooDreams, Duelz, and NYSpinz. It currently has licenses in the Isle of Man, Malta, Sweden, and the UK.
Provided the transaction moves forward smoothly, it could be a precursor to other acquisitions. DoubleDown launched its initial public offering (IPO) on NASDAQ (ticker symbol DDI) in September of 2021, and Kim added that more mergers and acquisitions are now on the table.
Market Provides Mixed Results
DoubleDown has had a tumultuous ride following its IPO. On Sept. 3, 2021, it was trading at $16.15, after which it jumped to $17.62 two weeks later. Since then, it hasn’t been able to find solid ground.
The stock fell to $8.18 at the beginning of 2023. It recovered slightly since then, reaching $9.48 on Wednesday. In Thursday morning trading, it slipped again, dipping to $9.12.
Despite the changes, the company has been performing well financially. Last November, it provided its latest financial health report, showing $0.40 earnings per share for the third quarter. This beat estimates by $0.06.
The quarter produced revenue of $78.8 million, according to its financial report. Analysts had predicted about $79.13 million, so the results were slightly under expectations.
At the same time, at least one institutional investor liked what he saw. Someone picked up 15,108 shares worth about $149K. That came just ahead of a note from Macquarie, which put the stock at a rating of “outperform” with a target price of $17. It’s still trying to recover to that level.