ValueAct, a San Francisco-based hedge fund, took a stake in FanDuel mother or father Flutter Leisure (NYSE: FLUT) within the first quarter.
The Flutter brand as seen in an investor deck. Hedge fund ValueAct took a $78.18 million stake within the gaming firm within the first quarter. (Picture: Flutter Leisure)
The cash supervisor purchased 495,135 shares of the Dublin-based gaming firm valued at $78.18 million within the first three months of the yr, based on a Kind 13F submitting with the Securities and Change Fee (SEC).
That’s a brand new place for ValueAct and the hedge fund’s lone supply of direct publicity to the sports activities wagering trade. Flutter is one in every of 12 fairness positions listed within the regulatory doc. Flutter now represents 1.72% of ValueAct’s portfolio.
ValueAct Funding May Justify Flutter Transfer to NYSE
Whereas ValueAct’s $78.18 million stake in Flutter represents a scant proportion of the corporate’s $37.33 billion market capitalization, the funding could possibly be justification for the sportsbook operator’s choice to checklist its shares on the New York Inventory Change (NYSE).
That transfer occurred on Jan. 29. Previous to that, Flutter instructed traders one of many causes it wished to checklist in New York was to develop its viewers {of professional} traders. ValueAct taking a stake within the gaming firm is one instance that the NYSE itemizing has already been validated, however there’s extra to that story.
First-quarter 13F filings indicated not less than 135 cash managers personal shares of Flutter, based on the SEC. It’s possible lots of these positions predate the gaming firm itemizing in New York, but it surely’s additionally possible that ValueAct isn’t the one skilled market participant that initiated a place within the FanDuel mother or father within the first three months of 2024.
That rising investor group could possibly be among the many the explanation why Flutter shareholders earlier this month overwhelmingly permitted the corporate’s plan to shift its main itemizing to the NYSE — a transfer Jefferies Fairness Analysis analyst James Wheatcroft expects may happen as quickly as Could 31. He charges the inventory a “purchase” with a $275 value goal, implying upside of about 35% from present ranges. In a be aware to purchasers out earlier this week, Wheatcroft noticed that Flutter trades at 17x money stream, implying its deeply discounted relative to DraftKings (NASDAQ: DKNG). DraftKings, Flutter’s main US rival, trades at 39x money flows, based on the analyst.
What ValueAct Would possibly Need with Flutter
In some circles, ValueAct is described as an activist investor, which suggests it would push for board seats or a few of change at Flutter. Nonetheless, the hedge fund hasn’t introduced such plans and its present possession of the gaming fairness is probably going too small to have an effect on substantial change on the frm.
ValueAct, which has invested in over 100 firms and served on 47 boards, described itself as a long-term investor, indicating it may maintain its Flutter place for a while.
“Our objective is to depart an organization in a greater place than after we first invested in it. We frequently maintain positions for 3-5 years. Sometimes we maintain positions for 10 years or extra,” based on the hedge fund.
