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The two most undervalued SPACs at the moment to hold for THIS QUARTER- $LCA and $OPES.
Here’s a thread on $LCA inspired by @yatesinvesting @alexcutler247 and @JMacInvesting ( $OPES thread coming tomorrow):
Here’s a thread on $LCA inspired by @yatesinvesting @alexcutler247 and @JMacInvesting ( $OPES thread coming tomorrow):
$LCA was hammered in July from FUD regarding the CEO Tillman Fertitta. $LCA is merging with Golden Nugget Online Gaming this quarter to become $GNOG. $LCA is a blank check company that is also owned by Tillman Fertitta
This article sums up the FUD-> https://realmoney.thestreet.com/investing/stocks/landcadia-s-golden-nugget-online-gaming-deal-is-golden-for-tilman-fertitta-15361928
Quick summary:
-Fertitta is getting $30 Million for acquiring his own company
-Fertitta took $300 million dollar loan to save his Landry’s empire from the COVID crises (Loan has staggering 15% interest rate)
-Half of loan for his Landry’s empire will be paid off with LCA’s cash
-Fertitta is getting $30 Million for acquiring his own company
-Fertitta took $300 million dollar loan to save his Landry’s empire from the COVID crises (Loan has staggering 15% interest rate)
-Half of loan for his Landry’s empire will be paid off with LCA’s cash
-The other half of the loan will be assumed by... Golden Nugget Online Gaming. After the merger the company will have only $88 million cash and be $150 million in high interest debt on the balance sheet
These are realistic concerns for the company and the 35% decline $LCA had in July was completely reasonable. Now here’s why $LCA will skyrocket this quarter:
$GNOG will IPO this quarter through the merger. $DKNG (Went public through merger with DEAC in 2nd quarter- Announced December) is the only company on the market that is relatively similar to $GNOG. The price action and narrative between the two companies have been VERY similar
After the announcement that $DEAC was taking Draft Kings public, the holdings company went from $10 to around $18 at the peak of the hype, then crashed to $11.17 at the bottom during the market crash of March.
After the announcement that $LCA was taking Golden Nugget Online Gaming public, the holdings company went from $10 to around $17 at the peak of the hype, then very recently crashed to $11.15 at the bottom from the FUD I mentioned (Currently sitting at around $11.70)
While the price action was replicated between the two holdings companies from the announcements until their bottoms, I believe the same replication will occur from the bottom until after the merger.
Recap on $DKNG from bottom through merger -> went from $11.17 (bottom on March 12th) to $19.35 (IPO on April 24th) and topped out at
~$44 a month later on June 1st.
~$44 a month later on June 1st.
$Lca is up 5% from its bottom that happened two days ago. Since the merger is happening this quarter (most likely in September but could be this month) I expect a steady uptrend to ATH’s (over $17) by the IPO in September (most likely IPO month).
Although $GNOG will be in heavy debt thanks to Fertitta, I don’t believe this will be able to hold down the valuation of this promising company because of it’s large market share and growth potential in a very promising sector.
Golden Nugget is a household name across the country just as Draft Kings is, and GNOG is the #1 Online Casino in New Jersey. Their operations are already profitable and expanding to other states such as Michigan, Pennsylvania, etc. as it becomes legalized across the country.
Here is their investor presentation that covers their huge growth potential:
https://www.sec.gov/Archives/edgar/data/1768012/000110465920077710/tm2023623d3_ex99-2.htm
https://www.sec.gov/Archives/edgar/data/1768012/000110465920077710/tm2023623d3_ex99-2.htm
$LCA is the cheapest online casino play bringing in massive revenue and profitability in the gambling capital of the world. The Fertitta FUD is bringing as huge of a buy opportunity as $DEAC/ $DKNG did with the COVID FUD.
To sum this all up, $LCA is a safe and golden swing play that you can expect to 2-5x your money in the next couple months if you hold tight through the merger. I expect this to be $30-$50 by October
