GAN Eyes May IPO, Could Raise up to $34.5 Million in NASDAQ Listing

Posted on: April 27, 2020, 10:24h. 

Last updated on: April 27, 2020, 12:21h.

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

Online gaming software provider Gan Ltd. said today its upcoming initial public offering (IPO) will consist of 4.05 million shares priced between $6.50 and $8.50, meaning the company could raise up to $34.5 million in its US listing.

GAN IPO Raise
GAN is planning a May IPO on NASDAQ that could raised up to $34.50 million. (Image: Bloomberg)

It appears as though GAN, which was originally targeting a NASDAQ listing by the end of this month, will price its IPO during the first week of May. The UK-based company is waiting on the exchange to approve the listing and its preferred ticker of “GAN.”

At the midpoint of the proposed range, GAN Limited would command a fully diluted market value of $192 million,” said IPO research firm Renaissance Capital in a note out Monday.

Underwriters have a 30-day option to buy another 608,250 shares.

Assuming the $192 million market capitalization proves accurate and stays in that neighborhood for some time, GAN would be born in the US as a micro-cap stock, a classification of equities defined as those with market values of $50 million to $300 million. That means the gaming technology provider would need to appreciate in value and top $300 million in capitalization to be classified as a small-cap name, a more widely followed group of stocks.

Trading Up

Currently, GAN has two listings – one on the Alternative Investment Market (AIM) in London, and another over-the-counter in the US under the ticker “GMMNF.” Both are venues often used by smaller growth companies investors view as speculative.

As part of the NASDAQ IPO, the London and OTC shares will be pulled with current investors receiving stakes in the new listing.

“The company is currently listed on London’s AIM under the symbol GAN,” according to Renaissance Capital. “Adjusting for a four-for-one share exchange prior to the closing of its US IPO, GAN’s as-converted last close was $8.29, above the proposed midpoint.”

GAN is pursuing the NASDAQ IPO for multiple reasons. First, the company believes a listing on a major American exchange will make it easier to raise capital if needed. Second, the firm derived about 80 percent of its 2019 revenue from US-based clients, a number that could increase as the online gambling and sports betting markets here grown.

“GAN Limited was founded in 2002 and booked $30 million in sales for the 12 months ended December 31, 2019,” notes Renaissance.

Busy Betting IPO Activity

While many market observers speculated the 2020 IPO window was rapidly closing due to increased market volatility forced by the coronavirus pandemic, the opposite is proving true for gaming-related offerings.

Along with the upcoming GAN IPO, daily fantasy sports (DFS) giant and sportsbook operator DraftKings (NASDAQ:DKNG) went public last Friday. That company gained 10.38 percent in its first day of trading and is higher by 4.15 percent at this writing on Monday.