Betfair Shares Drop
Betfair
For the first time since their initial public offering, Betfair's share price has dropped below the original float price of £13.
They fell a substantial 8% in value on Wednesday morning but managed to recover slightly throughout the rest of the day to finish the day trading at £12.23. Betfair, the gaming giant and operator of popular Playtech powered casino, began trading just over one month ago on October 22. All of the financial services companies that advised Betfair on the float (Barclays Capital, Morgan Stanley and Goldman Sachs) gave the Malta licensed company cautious ratings and conservative price targets.
A sign of the investors new lack of faith in the online gambling company was that, when asked about the shares, they said that they were worth hanging on to, not pouring money into.
Betfair was set up by Andrew Black and Edward Wray in 2000 and has become the largest online betting company since its creation, having over 3 million clients and turning over more than £50 million every week.
At the time of their initial public offering, the share price of £13 valued Betfair at little over £1.5 billion but recent threats to leave the UK in order to receive lower tax rates could have effected traders belief in the company.
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