BUSINESS

Fortuna soaring off Sazka bankruptcy

TAGs: Bankrupt, Fortuna Entertainment Group, Sazka

fortunaOn the heels of the official announcement that Sazka was indeed bankrupt, Fortuna Entertainment Group has been on fire.

Bloomberg reports Fortuna rose 6.3 percent by close in Prague which marked its biggest advance and the highest closing level since the stock started trading in October 2010. More than 636,000 shares changed hands, or seven times the three-month daily average.

Sazka’s decline has done nothing but good things for Fortuna. Fortuna has gained 25 percent so far this month after stating in the beginning of May that earnings before interest, taxes, depreciation and amortization rose an annual 44 percent in the first quarter. Fortuna plans to roll out lottery operations in July to take advantage of a sizable chunk of the Czech gaming market.

The Prague Municipal Court declared Sazka bankrupt after a meeting with creditors of the Czech lottery operator and Fortuna has hinted towards being ready to bid as much as 2 billion koruna ($117 million) for Sazka’s lottery business.

In a Bloomberg report, analyst Ondrej Moravansky at Cyrrus brokerage in Brno, Czech Republic felt “Sazka’scontinuing problems should keep having a positive influence on Fortuna’s shares,”, wrote in a report today. “A takeover of Sazka’s assets by Penta seems unlikely, as we believe the antimonopoly office would prevent that.”

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com