Back in May, I’d discussed why I was stoked about buying the dip in Score Media (TSX:SCR)(NASDAQ:SCR) stock. Shares of Score have shot up 93% week over week as of close on August 10. I’d like to credit my ESP for my recommendation back in May, but it turned out to be an acquisition that spurred the big move. Today, I want to discuss what this means for Score. Moreover, I want to look at another TSX stock in the gaming space that you can stash in your portfolio.
Why Score Media stock soared last week
Last Thursday, Penn National Gaming announced that it would acquire Score Media in a $2 billion cash and stock deal. Score Media stockholders will receive $17 in cash and $0.2398 shares of Penn National per share of the Toronto-based gaming company. The stock shot up on the news, which seemed to indicate that Score Media shareholders were pleased.
The deal gives Penn National additional access to the Canadian gaming market. There is considerable excitement after the federal government pushed forward legislation that will permit single-game sports betting going forward. This is a multi-billion-dollar market that companies like Penn, Draftkings, and others are eager to get in on.
In July, I’d discussed why Score was a TSX stock that could make investors rich due to its exposure to this promising market. It now joins Stars Group on the list of Canadian gaming companies that were snatched up, as this industry grows and experiences consolidation.
Here’s a TSX stock in the gaming space to buy instead
The acquisition will take Score out of the game for TSX investors. However, that does not mean that Canadians are out of options when it comes to seeking exposure to the gaming space. Bragg Gaming (TSX:BRAG) is a Toronto-based company that provides business-to-business online gaming solutions to a global client base. This TSX stock has dropped 14% in 2021 as of close on August 10. However, its shares have climbed 34% over the past week.
Bragg’s stock surged on news that it was awarded a licence to supply its exclusive content via its proprietary remote game server to operators in Greece. The company has its eyes on expanding to new global markets in the months and years ahead. It already boasts licences in Malta and Romania and can offer its content in jurisdictions including Sweden, Denmark, Portugal, and many other European nations.
The company is set to unveil its second-quarter 2021 results before markets open today. I’m in the dark regarding this release at the time of this writing. In Q1 2021, the company reported revenue growth of 62% year over year to $20.9 million. Meanwhile, wagering revenue generated by customers increased 52% to $5.1 billion — up from $3.4 billion in the first quarter of 2020. Better yet, adjusted EBITDA soared 234% to $3.4 million.
Investors will require patience for this TSX stock. The company is still in an early expansion period and has yet to achieve profitability. Still, it has made promising leaps with its revenue growth and expansion into new markets in recent quarters.