For the second time this year, Scientific Games Chairman Ron Perelman has opted to increase his stake in the company. Last week in a filing with the SEC, it was announced that the chairman was purchasing an additional 230,000 shares in the company, valued at $4.6 million. This increases his total stake in the company to nearly 40% of the total shares.
In June, Perelman had already purchased an additional 230,000 shares in the gaming equipment company. This also cost him $4.6 million and helped to bolster the stock price to nearly $20 per share.
Early last week, the chairman had purchased 110,000 shares for about $2.2 million, then added the additional 120,000 shares two days later. This gives him a total of about 36.38 million shares that are valued at about $730 million.
The stock price of Scientific Games had surged at the beginning of 2019 but has steadily declined into June. It was surmised that his purchase of the stock was to bolster prices, which did have an effect early on.
However, the debt incurred by the company is acting as an albatross right now. The current debt is valued at $8.65 billion at the end of the second quarter of 2019. That is more than four times the current market value of the company, set at $2.15 billion.
The news has not been all bad, however. Scientific Games announced earlier in September that they had partnered with Caesars Entertainment on a new sports betting expansion in the Indiana market. “We’re thrilled to expand our partnership with Caesars in the U.S. OpenSportsis a great platform that’s shown rock-solid performance, putting players at the heart of the betting experience,” SG Digital CEO Jordan Levin said in a statement in early September. That help to bolster the stock price by 25% from the first of this month.
In addition, SG signed an exclusive 10-year pact with the nation of Turkey, naming it as a company that would provide services and technology for the country’s national lottery system. That raised the price of the stock by 7% in just one day.
If the company is in serious financial trouble, it appears that its chairman is all in. Perelman’s MacAndrews & Forbes Holdings initially purchased 25.92 million shares in the company in early 2007, of which he owns 3.8 million personally. Now the combined shares of the two entities are nearly 60% more than his initial investment.
