BUSINESS

Betfair facing a tough year

TAGs: Betfair, morgan stanley, share price

betfair-facing-tough-yearAs far as gambling industry news goes it’s fair to say that Betfair have had their fair share of column inches over the past 12 months. If it wasn’t the defamation claims in Australia, or their IPO in the UK, then they were off cavorting in California, in between being called out by Mr Calvin Ayre himself. The first pieces of news on the publicly traded company this New Year isn’t the best news that they could have hoped for.

After floating on the stock market, there’s been more than enough chance for the financial-based press to have a dig at them. Today is no exception.

Yesterday saw Betfair’s shares close down 34p at 937½p, the lowest that they have dipped since opening at around 1400p when they initially floated back in October. They reason for the fall is because US investment bank Morgan Stanley, who headed the original floatation with Goldman Sachs, revised their estimates on Betfair’s financial performance.

Morgan Stanley are mainly worried about effect new regulations could have on the business commenting that it may have a “significant impact on the group’s growth and profitability.”

“The 36% drop in the shares in the last two months looks steep, but new information at the interim results leaves us nervous about current trading trends (and further snow will not have helped), and we think the business will need to deliver a few solid quarters to restore investor confidence,” wrote Morgan Stanley analysts in The Telegraph.

Meanwhile the Independent was speculating as to what was going on with Betfair’s Twitter account. On their website they are very puzzled by Betfair’s latest tweet saying: “I look to the skies. Another eagle will be here soon,” followed by a retort from the author saying, “What on earth is going on?”

Well the account’s either been highjacked by a Philadelphia Eagles fan or they really have hired some oddball agency to manage their marketing strategy.

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