Secretive Short-Seller Report Wipes €2.5bn From Evolution Market Cap

Written by:
Aaron Goldstein
Published on:

More than €2bn in market cap had been wiped away from one of the world's leading providers of online casinos market cap this past week, but iGamingNext asks if a newly released short seller report was as damning as initially believed.


That report released by The Analyst and sent out to select investors suggested that Evolution Gaming's unregulated revenue should be valued on a much lower multiple than the rest of the business.

More specifically, according to iGamingNext, Evolution's stock is apparently overvalued at 40x full-year 2021 EBIT due to the fact 62% of its overall revenue is derived from unregulated markets.  This presents a risk due to future regulatory clampdowns in areas including Asia and the US.

“We believe only the profits from regulated markets can be valued at this multiple,” said the report.

The Analyst Report also points to Asian exposure, crypto complacency and risks by regions. For example, Evolution reportedly conducted some business in Syria and Iran.

As to the crypto concerns, the report points out that no cryptocurrency gambling operator has been licensed to operate in any US state, including Evolution's, which is believed to be the largest online crypto casino in the world.

iGamingNext concludes that it is well known some of the biggest suppliers derive a portion of their revenues from unregulated markets and that Evolution publishes this fact each quarter.

Evolution's stock price did rebound by 3% later in the day on Thursday.

And let's not shed a tear for the company.  Tricia Black of writes that Evolution begins 2022 in a position where it already works with more top-tier operators than other providers in the industry. When it comes to B2B online casino services, they are at the top of the market.

- Aaron Goldstein,

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