For gambling stock Bally’s Entertainment (BALY), a recent move into the Australian gambling market is sparking up some imaginations, and catching investors’ attention. Attention sufficient, in fact, to fuel one big old surge in share prices. Bally’s shares are up over 23% in Monday afternoon’s trading, as Bally’s looks to park some cash in a struggling Australian casino operation.
The operation in question, Star Entertainment, is expected to land around AU$250 million, or potentially more, which works out to just over $150 million U.S. This will come from a capital raise underwritten by Bally’s, and would likely involve convertible notes that could be changed into a slight majority of Star shares, 50.1%.
Though the capital raise would allow current Star shareholders to buy in, on a “pro rata” basis, reports note. Star, for its part, plans to review the Bally’s proposal, though rushes to assert that such a deal may not go through. Given Star’s recent issues with the Australian government and the overall trading environment, Star may not have many other choices for quick funding. Bally’s also noted that its offer was superior to others Star has revealed so far.
Another DEI Hit
Bally’s, however, is not having things all its own way, reports note. Its recent investment program for women and minorities has hit a wall at the regulatory level, as Bally’s is now “…continu(ing) to work to obtain SEC clearance…” to allow the program to even go through.
The current environment against diversity, equity and inclusion (DEI) programs is harsh enough, but Bally’s program had one more hit against it: there are two lawsuits outstanding from white men who wanted to get in on the program, but were reportedly turned away for not meeting the “women and minorities” part. This is a problem for Bally’s, as the deal with the former Mayor Lori Lightfoot administration that let them get a casino license in the first place required at least 25% of the proposed venue to be owned by women and / or minorities.
Is Bally a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on BALY stock based on four Holds assigned in the past three months, as indicated by the graphic below. After a 35.57% loss in its share price over the past year, the average BALY price target of $15 per share implies 0.94% upside potential.
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