SEAH / Super Group - Online Sports Betting / Gaming Opportunity

SEAH is a SPAC which is seeking to acquire Super Group, a leading global online sports betting / casino player:

  • 2.5+m monthly active customers
  • $44+bn in wagers in last 12 mths
  • Licensed in 23 jurisdictions (excl. the US which it is expanding into) across the Americas, Europe, Africa and the rest of the world

Why I like it
The tweet above offers quite a nice summary of the highlights but my take on why it’s an interesting opportunity:

  • Global player in the online betting/casino space which has been quite hot
  • Already profitable with strong financials (2021E Revenue of $1.5bn; EBITDA of $350+m)
  • Reasonably valued vs. peers (Undemanding 2022 EV/Rev of 2.6x and EV/EBITDA of 11.1x at $10 share price)
  • Company executing well on its growth plans - Added a 5th live market in the US and new license in Poland (’s-Betway-Continues-New-Market-Expansion)
  • Merger expected to close in 4Q 2021
  • No PIPE, with the original Super Group and Sponsor retaining c.90% in the entity post-merger

How I’m playing it
Price has run up a bit and I like the stock at a price closer to $10 so I am running a buy/write on this, buying the stock at c.$11+ and selling calls expiring Dec '21 with a strike of $12.5 to collect c.$1 of premium. This allows me to reduce my cost basis to c.$10 if the stock doesn’t run, but caps my upside at just over 20% if it surges and blows past $12.5 by Dec.

If you like the stock and want to be more aggressive, you can choose to buy shares or calls instead.

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