If a CEO is spending a substantial amount of money on company stock, investors should take note. CEOs tend to be way ahead of analysts and portfolio managers when it comes to the performance of their companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight some CEO buying at PLAYSTUDIOS Inc (MYPS:US). PLAYSTUDIOS is a publisher and developer of casual games for mobile and social platforms. Its apps are powered by the company’s playAWARDS loyalty platform, which enables players to earn real-world rewards from more than 70 iconic hospitality, entertainment, and leisure brands across 15 countries and four continents. The company is listed on the NASDAQ Global Market and currently has a market capitalization of $595 million.
PLAYSTUDIOS Inc: Insider Buying
Our data shows that since January 20, Chairman and CEO Andrew Pascal has purchased stock four times at prices of between $3.77 and $4.77 per share. In total, the insider has picked up 112,600 shares, spending a total of around $490,000 on MYPS stock.
This trading activity is worth highlighting due to the fact that Mr. Pascal is the Co-Founder of the company. This means he is likely to have an excellent understanding of the business and its prospects.
It’s worth noting that Mr. Pascal has a track record of success in the gaming industry. Previously, he served as President and CEO of WagerWorks, Inc., a company he founded as a casino solutions and content supplier for many of the world’s largest gaming and media brands. Shortly after Mr. Pascal moved to Wynn Las Vegas in 2003, WagerWorks was acquired by International Game Technology.
PLAYSTUDIOS’s third quarter results reflected the company’s continuing efforts to seed its growth for the long term.
For the quarter, adjusted earnings before interest taxes depreciation and amortization (AEBITDA) was $9.6 million, compared to $13.3 million during the third quarter of 2020. The dip here reflected costs associated with the ongoing investments and other expenses related to the launch of myVEGAS Bingo earlier in 2021, along with the investments in other game development initiatives.
However, Mr. Pascal was very confident that the company is on the right track. “We continue to believe in our growth strategy, and remain focused on servicing our existing players, expanding our game portfolio, and evolving our playAWARDS platform,” said the CEO.
Meanwhile, the company said that, due to its depressed stock price, it had approved a stock repurchase plan to repurchase up to $50 million of the Company’s Class A common stock over a period of 12 months.
“We still believe that the best use of our capital is to advance our M&A efforts. However, we also believe our current price in no way reflects the value or future potential of our business and we will continue to assess the benefits of purchasing our own equity should we deem it appropriate,” commented Mr. Pascal.
In light of these developments, we see the insider buying here as a bullish indicator.