A share purchase announcement late last week had the investment community once again buzzing over Scientific Games Corp. But the transaction had nothing to do with the gaming equipment giant’s chairman and largest stockholder.
Greenlight Capital, a hedge fund controlled by David Einhorn, told clients the firm added stock positions in three companies, including Scientific Games. The position in the Las Vegas firm was described as “small.”
David Einhorn/Photo via CNBC
The news was announced Thursday and Scientific Games rose 3 percent and saw more than 2.6 million shares traded. On Friday, the company closed at $20.19, up almost 5 percent.
Einhorn noted in a letter to clients that Scientific Games trades at an attractive valuation after spinning off and listing its social gaming business, SciPlay Corp.
It was unclear how large the purchase was in Scientific Games. There has not been any Securities and Exchange Commission filings on the acquisition.
In June, Scientific Games Chairman Ronald Perelman spent $6.1 million to purchase 305,000 shares of the company’s stock. In December, Perelman spent $27 million to purchase 1.5 million shares.
Perelman, through his New York-based MacAndrews & Forbes investment arm, controls more than 36.4 million shares of Scientific Games, or almost 40 percent of company. Scientific Games provides gaming equipment to both the casino industry and lotteries worldwide.
Scientific Games has not commented on Perelman’s stock purchases.
Greenlight Capital funds returned 5.8 percent in the second quarter, bringing the year-to-date gain to 17.4 percent, according to the letter and reported by CNBC. The fund rode successful bets on gold and GM and a short position in Tesla.
The other positions Greenlight took were in Chemours Company, an American chemical company, and retailer Dillard’s.
Scientific Games has made several moves in the past few months. In May, Former Aristocrat Leisure Ltd. CEO Jamie Odell joined the company as a special advisor to Perelman. In July, former Aristocrat Technologies Executive Matt Wilson was named CEO of the gaming division, but he won’t begin his role until next year.
The company plans to report second quarter earnings on Thursday.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
