PLTK - Playtika among top game gainers as Wedbush sees upside from sell-off

2023-05-01 14:14:38 ET

Israel-based mobile game developer Playtika ( NASDAQ: PLTK ) was among top gainers in the videogame space Monday, up 2.9% after Wedbush Securities saw opportunity in a Friday sell-off.

Playtika stock ( PLTK ) sank 8.8% Friday in the wake of news that On Chau, its second-largest shareholder, was set to sell some 78.8M shares in the company at $7.93 each -- gross proceeds of about $625M, and marking about a 28% discount to the previous close.

That move added to investor frustration around the company's search for strategic alternatives, analyst Michael Pachter noted.

But "in contrast, we have a positive view on Friday's news, as it could significantly improve Playtika's free float, which could increase investor interest," he said.

Similar to other recent transactions, the proposed sale is "tied to the indebtedness of Playtika's largest owners," he added.

Pachter is maintaining an Outperform rating on Playtika ( PLTK ) with a 12-month price target of $14.25, currently implying 38% upside.

Playtika ( PLTK ) is set to report earnings before the open on Thursday, with consensus expectations for earnings per share of $0.18 on revenues of $646.5M (a 4.5% decline from the prior year).

On also sold 300,000 shares (for total proceeds of $3.52M) earlier in April .

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