Personally I think the way analyst determine market share is honestly quite flawed. The way market share is determined is based on % of a company turnover compared to the state turnover. Turnover is calculated as the amount of money that is put on wagers within a particular company.
The reason I think the metric is currently flawed is because of the massive bonus bets to signing up customers from 'big' companies like fanduel, caesars and draftkings. A few of these guys are giving $2000 dollar's as bonus bets to sign up a customer. For example, a customer sign's up gets a 2000 bonus bet. The punter can place 10 bets each worth $2000 meaning from this one punter the turnover is 20k without actually using their own funds (or very little of their own funds). These 10 bets... 5 may win and 5 may lose but the money circulating in the bets is based on money given by the company itself. Consequently, the company doesn't make money unless the punter add's his own funds into the account. Essentially, a punter that has signed up can produce massive turnover for a company while not contributing significantly with adding their own funds to the site.
Until these massive promo bets are reduced the market share breakdown will be massively skewed to the companies that are offering $2000 sign up bonuses in which aren't really growing the amount that is being wagered within their company with 'real' funds but are being subsidised by the company itself. While I believe this will retain a number of customers to the big guys I also believe that once bonus bets are drying out the better's will revert to the company that has the best product. And who the hell know's who has the best product so DYOR
What I am trying to say is while PBH 'market share' in some states dropped by nearly half I do believe a fair bit of it is due to these huge bonus bets ($2000) that are being handed to customers on different platforms. These bonus bets then contribute a significantly greater amount to turnover through repeated bets of winning/losing meaning a 2000 bonus bet can contribute 10,20,30, 50k in turnover depending on the punter and number of bets. With sites giving this bet to thousands of new punters it's clear that the magnified turnover in states right now is fabricated by the money that is given by these companies to customers.
In conclusion, no PBH is not dying because of this reduction in market share, yes it is being hit by analyst using the market share figures to make long term DCF model's of PBH financial performance. Should analysts use these figures... probably not but there aren't better metrics to use to forecast growth. Is PBH cheap because analyst's are using these metrics... maybe but DYOR because who knows maybe the customers are actually sticky to the big guys once bonus bets reduce.
So have a nice day anyone and personally I don't have much invested in PBH but I am excited to see how this industry develops and play's out over the next decade
PBH Price at posting:
$8.02 Sentiment: Hold Disclosure: Held
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