On Thursday, PocketFives brought you an article about Canadian officials showing up at the offices of Amaya Gaming, the owners of PokerStars and Full Tilt, reportedly due to insider trading associated with the company’s purchase of the Rational Group back in June. As you might guess, a visit from the fuzz didn’t go over too well with investors. The verdict: the stock’s price sank by 18% on Friday.
According to a Bloomberg article, “Shares of Amaya slumped to C$28.60 at the close in Toronto trading, the biggest drop since July 2010. The stock had surged more than fourfold this year through yesterday, making it one of the best performers in Canada.” The stock had fetched around C$10 a share as recently as the beginning of June, but nearly lapped C$40 last month.
In the last 52 weeks, shares of Amaya have traded between C$5.61 and C$39.25. It has a market cap of C$3.7 billion and is currently the largest publicly traded online gambling firm in the world.
Amaya officials responded to the raid by saying, “To the Corporation’s knowledge, this does not involve any allegations of wrongdoing by the Corporation. Amaya will continue to cooperate, if and as requested, consistent with our practice to always cooperate with regulatory authorities. The Corporation will continue to monitor the investigation if and as it proceeds. The investigation has had no impact on Amaya’s business operations, employees, or companies.”
Bloomberg added, “Amaya, Canaccord Genuity Group Inc., and Manulife Financial Corp. all had offices searched by investigators on December 10 as part of the probe.”
Amaya has remained focused on bringing PokerStars back to the New Jersey market, which, like the rest of the US, it abandoned on Black Friday. However, the company is in “time out” in New Jersey until Q1 2015 or later.