{"id":243251,"date":"2022-11-15T15:37:20","date_gmt":"2022-11-15T21:37:20","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=243251"},"modified":"2022-11-16T15:55:57","modified_gmt":"2022-11-16T21:55:57","slug":"playags-stock-falls-on-news-of-apollo-share-sale","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/","title":{"rendered":"PlayAGS Tumbles on Apollo Offering, Analysts Question Timing"},"content":{"rendered":"

Shares of PlayAGS (NYSE:AGS) plunged Tuesday. That’s after the gaming device manufacturer announced the sale of more than 8.2 million shares held by private equity firm Apollo Global Management (NYSE:APO), prompting sell-side analysts to question the timing of the offering.<\/p>\n

\"PlayAGS
A slide from a PlayAGS investor presentation. The stock slid today on news Apollo is selling its shares. (Image: PlayAGS)<\/figcaption><\/figure>\n

The stock finished lower by 13.39% on volume, which was more than 20 times the daily average. Las Vegas-based PlayAGS isn\u2019t directly selling any shares, nor will it receive proceeds from the offering. Apollo\u2019s stake in the gaming company represents about 22% of the shares outstanding.<\/p>\n

The shares being sold by Apollo are the last of the private equity giant\u2019s stake in PlayAGS, following similar transactions in 2018 and 2019.<\/strong><\/p>\n

J.P. Morgan and B. Riley Securities are the underwriters for the offering.<\/p>\n

Tough Timing for PlayAGS Stock<\/h2>\n

News of the share sale arrives less than a week after PlayAGS stock tumbled<\/a> following its third-quarter earnings report. The shares recovered about half the earnings-induced slide over the past several days, but those gains were wiped today.<\/p>\n

The announcement of Apollo liquidating its stake in the slot machine maker also arrives about two months after takeover talks with<\/a> Inspired Entertainment (NASDAQ:INSE) ended, sending PlayAGS stock lower. There was speculation that Apollo may have loomed large in those discussions, but that was never publicly revealed. Still, analysts say the timing of the share sale is questionable.<\/p>\n

Specifically, the announcement follows a Q3 earnings report that while seemingly right down the middle, was met with a -21% decline in the shares the following day,\u201d wrote Stifel analyst Jeffrey Stantial in a report \u00a0to clients. \u201cAGS has partially recovered, though still -11% T1W. We have yet to hear of anything credible justifying the sell-off from a fundamentals perspective, though the timing of the secondary sale shortly thereafter could potentially draw scrutiny.\u201d<\/p><\/blockquote>\n

He did, however, note Apollo\u2019s sale removes a \u201clongstanding overhang\u201d from PlayAGS stock, which often traded at deep discounts relative to peers due to the private equity firm\u2019s position in the shares. The analyst added Apollo\u2019s sale was likely more \u201cmechanical\u201d than anything else, as the financial company has been involved with PlayAGS for a decade and its remaining stake was small.<\/p>\n

Stantial reiterated a \u201cbuy\u201d rating and an $11 price target on PlayAGS.<\/p>\n

PlayAGS Stock Still Cheap<\/h2>\n

In a note to clients today, Roth Capital analyst Edward Engel also questioned the timing of the Apollo sale. He noted the private equity firm may have been concerned with PlayAGS\u2019s efforts to de-lever its balance sheet as interest rates rise<\/a>. Much of the gaming company\u2019s debt is a variable rate, meaning it\u2019s hard to reduce those liabilities when borrowing costs climb.<\/p>\n

Conversely, the analyst added that it is somewhat surprising Apollo decided to part with its PlayAGS stake now, particularly if another suitor comes calling for the gaming company.<\/strong><\/p>\n

\u201cAGS trades at an 17% yield to our 2023E FCF, or 5.1x EBITDA. This is a wide discount to supplier peers trading at a 9-12% yield and 6-8x EBITDA. Given this wide discount, we find Apollo’s sale surprising, particularly given potential cost synergies if AGS is targeted by an acquirer,\u201d concluded Engel. \u201cOf all the stocks in our coverage, we believe AGS benefits the most from slowing rising rates, where lower interest rates would support both the valuation and deleveraging.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of PlayAGS (NYSE:AGS) plunged Tuesday. That’s after the gaming device manufacturer announced the sale of more than 8.2 million shares held by private equity firm Apollo Global Management (NYSE:APO), prompting sell-side analysts to question the timing of the offering. The stock finished lower by 13.39% on volume, which was more than 20 times the […]<\/p>\n","protected":false},"author":46,"featured_media":243256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810,69293],"tags":[81903,81898,81890],"acf":[],"yoast_head":"\nPlayAGS Stock Falls On News Of Apollo Share Sale<\/title>\n<meta name=\"description\" content=\"PlayAGS plunges on news Apollo Global is liquidating its stake in gaming company.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PlayAGS Stock Falls On News Of Apollo Share Sale\" \/>\n<meta property=\"og:description\" content=\"PlayAGS plunges on news Apollo Global is liquidating its stake in gaming company.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-15T21:37:20+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-16T21:55:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/ags2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"960\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/\",\"url\":\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/\",\"name\":\"PlayAGS Stock Falls On News Of Apollo Share Sale\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/ags2.jpg\",\"datePublished\":\"2022-11-15T21:37:20+00:00\",\"dateModified\":\"2022-11-16T21:55:57+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"PlayAGS plunges on news Apollo Global is liquidating its stake in gaming company.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/playags-stock-falls-on-news-of-apollo-share-sale\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/ags2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/ags2.jpg\",\"width\":1280,\"height\":960,\"caption\":\"A slide from a PlayAGS investor presentation. 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