Einhorn’s Greenlight Capital Exits Betway SPAC

Posted on: August 16, 2021, 10:00h. 

Last updated on: August 17, 2021, 12:55h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Greenlight Capital, the hedge fund run by financier and poker player David Einhorn, sold its stake in special purpose acquisition company (SPAC) Sports Entertainment Acquisition Corp. (NYSE:SEAH) in the second quarter.

Einhorn Betway
Greenlight Capital founder David Einhorn at the World Series of Poker. His hedge fund sold shares in the SPAC bringing Super Group public. (Image: Institutional Investor)

Sports Entertainment is serving as the vehicle through which Super Group, the parent company of global online sports betting operator Betway, will go public. The parties announced a merger with a pre-equity valuation of $4.75 billion in April.

In a 13F filing with the Securities and Exchange Commission (SEC), Greenlight revealed it liquidated its position in the blank-check company at some point during the June quarter. But the filing doesn’t specify when that sale occurred, so it’s not clear if Einhorn’s hedge fund held shares into the Super Group merger announcement, or if it was out prior to that news becoming public.

Professional investors, including hedge funds such as Greenlight, are required by law to disclose holdings within 45 days of the end of the prior quarter.

Sports Entertainment Cash in

While the SPAC remains active, including in the gaming industry, share prices cooled off considerably as market participants questioned the sweetheart nature of these deals for blank-check sponsors, and the sour performances of many de-SPACed companies.

In the case of Sports Entertainment Acquisition, that bank-check stock was trading around $9.80 when the Super Group merger was announced. The stock subsequently ran to its high of $10.85, and gradually traded lower from there, closing at $9.91 on Monday. Depending on when Greenlight bought the stock, it appears likely the hedge fund made a modest profit on the trade.

At the time the deal was announced and with the aforementioned a pre-equity valuation of $4.75 billion, Super Group’s merger with Sports Entertainment represents one of the largest combinations to date between a SPAC and a gaming company.

Betway has market access to 10 states, including powerhouse sports wagering markets such as Colorado, Indiana, Iowa, New Jersey, and Pennsylvania.

Einhorn Maintains SPAC, Gaming Exposure

While Sports Entertainment Acquisition is no longer part of the Greenlight portfolio, Einhorn’s hedge fund still has exposure to gaming equities and companies that came to market via blank-check transactions.

For example, one of the fund’s new positions is Playboy Group (NASDAQ:PLBY), which came public again earlier this year following a merger with a SPAC. Playboy has some gaming exposure and is said to be interested in more deals in the industry.

Greenlight also owns stakes in sports betting data provider Genius Sports (NYSE:GENI) — another de-SPACed company — and streaming service provider fuboTV (NYSE:FUBO). Einhorn’s hedge fund was an early investor in fuboTV and is bullish on the company’s prospects as they relate to the still-nascent in-game betting market.

Greenlight also holds a position in social casino developer Playstudios (NASDAQ:MYPS), which went public in June following a SPAC transaction.