Why theScore (TSX:SCR) Stock Jumped 63% Today!

The Score Media and Gaming Inc. (TSX:SCR) stock has jumped 62% on an acquisition deal.

| More on:
Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept

Image source: Getty Images

After delivering stunning returns last year, Score Media and Gaming (TSX:SCR) has been subdued this year. The Score stock was down 64% from all-time highs, erasing billions in shareholder value. However, the bargain price seems to have caught the attention of a major American rival, who has now initiated an acquisition of the Score. 

Penn National Gaming announced an acquisition deal worth US$2 billion (CA$2.5 billion) in a combination of stock and cash. The Score stock is up 63% on the news. Here’s a closer look at what this means for shareholders and North America’s online gaming sector. 

The deal

Penn National Gaming, a Pennsylvania-based casino operator, is best known for its acquisition of David Portnoy’s Barstool Sports. Portnoy’s online presence and millions of followers have helped him create one of the fastest-growing media businesses in the sports industry. The partnership with Penn National was meant to disrupt the online gaming sector, as sports betting gets legalized across America. 

Penn stock, however, has been steadily declining this year. The stock is down 52% from all-time highs. The team needs a new growth engine and a wider digital media portfolio, which is why the Score was an ideal target. 

Penn’s management team has offered theScore shareholders US$17.00 (CA$21) in cash and 0.2398 shares of Penn National common stock for each theScore share they hold. The combined value of this deal for each individual investor is roughly US$34 or CA$42.5. 

The Score stock recovery

The announcement has helped long-term Score stockholders recover some of their lost momentum. At the time of writing, theScore stock is trading at $37 — a mere 30% below its all-time high of $54. Year to date, the stock is now up roughly 137%, making it one of the best-performing stocks in Canada this year. 

However, the stock is still trading 13% below the estimated value of the Penn deal. This seems like an opportunity for short-term traders to cash in. If the deal goes through as planned, it could deliver a swift and sizable return. 

The next Score

This deal is a major win for theScore stockholders. However, it will delist Canada’s biggest and most popular online gaming company. Investors now have only one alternative left: Enthusiast Gaming Holdings (TSX:EGLX)(NASDAQ:EGLX). 

Toronto-based digital media company has a sizable and rapidly expanding footprint in the online gaming space. According to its latest report, the company owns roughly a hundred gaming sites and over 1,000 YouTube channels, and it reaches out to over 300 million gamers every month. 

This means it could have as much potential as Barstool Sports or the Score in a few years as the industry matures. However, the stock is overlooked and underrated. Even after this deal was announced, the stock is up just 2%. This could be an opportunity for investors who missed out on the Score and are looking for their next big win.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.

More on Tech Stocks

stock analysis
Tech Stocks

Investing in AI: 1 Cheap Tech Stock Poised for Growth

Docebo is a little-known Canadian tech firm that's unlocking the power of next-generation AI technologies.

Read more »

Businessman holding AI cloud
Tech Stocks

5 Tech Stocks You Can Buy and Hold for the Next Decade

Don't make the mistake of thinking all tech stocks are alike. These five have a strong future both behind and…

Read more »

funds, money, nest egg
Tech Stocks

TFSA Investors: 2 TSX Stocks for a Legit Shot at $1 Million in 20 Years

Undervalued TSX tech stocks such as Neighbourly Pharmacy can help investors to turn a $100,000 investment into $1 million in…

Read more »

Dividend Stocks

TFSA: 3 Value Stocks to Buy in April

The March dip is a synopsis of the mild recession banks anticipate as high interest rates trickles down. It is…

Read more »

Growing plant shoots on coins
Tech Stocks

Got $5,000? These Are 2 of the Best Growth Stocks to Buy Right Now

If you've got $5,000 to invest, buying growth stocks like Lightspeed Commerce and Microsoft is a smart decision.

Read more »

edit Colleagues chat over ketchup chips
Tech Stocks

2 Easy TSX Stocks for Beginners in April 2023

You don’t need to think twice about loading up on these two Canadian stocks in April.

Read more »

calculate and analyze stock
Tech Stocks

Growth Stocks: A Once-in-a-Decade Opportunity to Get Rich

Growth stocks are generally cheap now. So, this year is a good opportunity to shop for growth stocks, perhaps through…

Read more »

grow money, wealth build
Tech Stocks

$10,000 Invested in These Growth Stocks Could Make You a Fortune Over the Next 10 Years

Growth stocks such as Dollarama and Chewy are well poised to deliver outsized gains to long-term investors.

Read more »