The CEO of Amaya Inc., parent company of PokerStars, is on the hunt for ways to make the company less dependent on its main online poker business, which sometimes can be an unstable source of revenue.
In the wake of the departure of founder and former CEO David Baazov, who stepped down last year amid legal problems stemming from insider trading allegations, new CEO Rafi Ashkenazi says he is ready to go the acquisition route to diversify the company’s revenue base. In an interview last week with Bloomberg, Ashkenazi said he plans to make use of the money the company has left over to spend after it finishes paying for the 2014 purchase of PokerStars and Full Tilt Poker for $4.9 billion.
“We are very open to acquisitions generally,” Ashkenazi told Bloomberg, adding that he is recruiting someone to focus on M&A opportunities with a high priority on sports-betting firms. “I’m far more driven by managing actively risks,” he said of comparisons bet3een himself and risk-taker Baazov. “I always plan for the worst and I always try to be ahead of the curve.”
With online poker in decline because of a combination of U.S. bans and expert players killing the mass market, Ashkenazi said, Amaya will look to diversify, at first with an increase in online casino games and sports betting.
“2017 will also be to a large extent the continuing transitional year for us, but probably from the second half of this year, I can be much more focused on finding ways to grow the company, not necessarily organically,” Ashkenazi said.
Shares of Amaya Inc. rose after the company forecast better-than-expected 2017 profit. Adjusted earnings this year will be $1.94 to $2.13 a share , Amaya reported, surpassing the $1.91 seen by analysts. The forecast drove the stock up as much as 3.2 percent to $21.09 in Toronto, its highest intra-day price since November.
“The company is managing poker erosion, growing casino/sports and containing costs,” Kevin Wright, an analyst at Canaccord Genuity Corp., wrote in a research note. Wright has a buy rating on the stock.
