The stock price for Rush Street Interactive has fallen by double digits, following a series of insider transactions that were made on the heels of RSI’s second-quarter earnings report. The stock was trading at $9.44 a share.
In five transactions over a four-day period, CEO Richard Schwarz and CFO Kyle Sauers offloaded 416,600 shares between them, with Schwartz pocketing $2 million and Sauers receiving $1.2 million, according to reports. During that period, as the sales were filed with the Securities & Exchange Commission, RSI stock trended 17 percent downward.
The sales were made in the wake of a second-quarter-earnings release that showed RSI to have achieved a 34 percent increase in year-over-year revenue. Also, guidance for 2024 cash flow was raised by 24 percent, according to RSI.
JMP Securities analysts extrapolated from the stock movement that any potential merger or acquisition of RSI isn’t happening. “The sale of stock was a small portion of their respective holdings, but points to several underlying takeaways related to M&A chatter around the industry,” they wrote.
JMP had highlighted RSI previously as a prime takeover target, citing its technology and market share, which includes a monopoly in Delaware. Also, RSI was reported in March to have peddled itself to DraftKings. That news moved RSI stock up to $6.90 per share.
Beyond the United States, RSI would offer DraftKings catchment areas in Latin and South America, including Colombia and Mexico. These are regions DraftKings has expressed a desire to penetrate.
At DraftKings, however, “Management has enough on its plate with its expanding online footprint in the U.S. and the recent acquisition of Jackpocket,” said JMP analysts, referring to DraftKings’s purchase of a lottery-services provider.
RSI’s stock price had marched upward over the past three weeks, as the company expanded operations into Peru. Despite this week’s selloff, JMP believes RSI shares to be fairly valued at their current price.
