Gambling stocks plunge amid global sell-off
Date: 2024-08-08 Author: Robert Beloved Categories: PAYMENT SOLUTIONS
Global stock markets fell sharply on Monday amid concerns about a slowdown in the US economy. The recent employment report was significantly worse than analysts expected, which was the main reason for the decline. Many stocks suffered significant losses, including companies in the gambling sector.
Shares of leading gambling operators hit new 52-week lows. Among them were Las Vegas Sands ($36.62/£28.65/€33.43), Wynn Resorts ($71.63) and MGM Resorts ($33.44).
The trading day began with Japan's Nikkei 225 index plunging 12.4%, its worst performance since Black Monday in 1987. In the US, the S&P 500 fell 3%, the biggest one-day drop since September 2022. The Dow Jones Industrial Average fell 2.6%, the Nasdaq 3.4% and the Russell 2000 3.3%.
All of the US's so-called "Magnificent Seven" stocks - Apple, Meta, Nvidia, Microsoft, Tesla, Alphabet and Amazon - closed with significant losses. According to the Wall Street Journal, their combined losses exceeded $650 billion in market capitalization.
Other stocks were not spared the wave of uncertainty either. Bitcoin fell about 7%, gold posted intraday losses of more than 2% and commodities also fell. The Cboe Volatility Index, known as the "fear index", reached its highest levels since the onset of the Covid pandemic.
Carrier and supplier stocks fall
In addition to companies hitting new 52-week lows, others also suffered losses. Caesars Entertainment shares are down nearly 7% but holding just above their 52-week low of $31.74. Regional operators Boyd Gaming are down 2%, while Red Rock Resorts and Churchill Downs are down 3.7%.
In sports betting, DraftKings is down just 0.7%, but its shares have fallen nearly 14% over the past five days, weighed down by a missed second-quarter earnings forecast and criticism over the announcement of an additional fee for players in high-tax states. Rival Flutter, the owner of FanDuel, is down more than 3% to $181.83.
Providers have also taken a hit, with Light & Wonder shares down nearly 5% and IGT down 1.3%, wiping out some gains from its deal to take Everi private under Apollo Global Management. Inspired Entertainment shares have fallen more than 17% in the past week, with 8% of that down on Monday.
Frank Fantini, founder of financial services firm Fantini Research, told iGB that the stock could continue to underperform. He noted that the general market is still overvalued, particularly for big tech stocks.
He also suggested that "weakening consumer demand could lead to a recession. If that happens, today could be a harbinger.
