Why has the 888 share price soared back above £1 today?

The 888 share price has collapsed over the last 18 months. However, the shares have skyrocketed in the last couple of days. Are they worth buying?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Diverse group of friends cheering sport at bar together

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The 888 Holdings (LSE: 888) share price has taken to the skies this week, rising 28% today and 43% since Monday morning. This has lifted the shares above the 100p mark for the first time since the end of January.

However, the stock was trading at 458p just over 18 months ago. So it will take a Herculean share price rally to ever reach those heights again.

What’s been causing this extreme volatility?

Turbulent times

To recap, the online bookmaker has been in almost permanent turmoil in recent times. Last year, it was fined £9.4m by the UK’s Gambling Commission for social responsibility and money laundering failings. This followed a £7.8m penalty in 2017, which was a record at the time.

Then in January, chief executive Itai Pazner announced his resignation after revealing the firm had launched an internal investigation into suspected money laundering by VIP customers in the Middle East. Prior to this, the chief financial officer had announced he was stepping down.

Also worrying is that the firm is saddled with around £1.7bn of net debt after merging with William Hill International last summer. And William Hill has itself been hit by a record £19.2m fine by UK regulators this year, though this settlement relates to the period before 888’s ownership.

In 2022, the company posted a £115m pre-tax loss due to costs associated with this merger. It is yet to appoint a new CEO.

Why are the shares rising?

It emerged yesterday that certain executives within the gambling industry have taken a fancy to the company’s fallen shares. Regulatory filings revealed that US-based FS Gaming Investments had built a 6.6% stake in the company.

This investment group includes Kenny Alexander, Lee Feldman, and Shay Segev. Alexander was formerly chief executive of GVC Holdings, the Ladbrokes and Coral owner now known as Entain. He was replaced by Segev, who subsequently stepped down to lead sports streaming platform DAZN. Feldman chaired GVC Holdings for 11 years before moving on in 2019.

So these are gambling industry veterans who are building a substantial holding in 888. The natural assumption then is that a takeover bid may be on the cards. If so, this could presumably result in a refinancing of the company’s debt, which might help rebuild value.

To buy or not?

Based on recent issues, I don’t think I’d sleep easy at night investing in this stock. I wouldn’t know what headlines I might wake up to next!

To be fair though, this is an industry where lots of bookmakers are falling foul of regulators. Entain, for instance, recently said it expects to incur a “substantial financial penalty” following an investigation by UK authorities. This relates to possible bribery offences by one of its former Turkish subsidiaries.

Long term, I don’t see any let-up in the regulatory scrutiny of betting firms, both in the UK and abroad. Even the Premier League recently announced a ban on gambling sponsorship on the front of football shirts, which will begin at the start of the 2026/27 season.

There may well be further share price gains if an actual takeover offer materialises. However, I think there are safer stocks to buy today. So I’ll be focusing on those instead.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

With a spare £300, here’s how I’d start investing this October

Christopher Ruane considers how he'd start investing if he had just a few hundred pounds to spare and was a…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Here’s how to invest £180 per week in an ISA to target a £9,343 second income

By investing less than a couple of hundred pounds each week into an ISA, this writer thinks he could build…

Read more »

Investing Articles

Here’s how I’d invest £200 per month to target a passive income of over £7,100!

Christopher Ruane walks through the mechanics of putting a couple of hundred pounds each month into shares to earn passive…

Read more »

Young Woman Drives Car With Dog in Back Seat
Investing Articles

£9,000 in an ISA? Here’s how I’d aim to turn it into a £10,207 annual second income

Our writer highlights a high-quality ETF that he thinks could help lay a solid foundation for a sizeable future second…

Read more »

Buffett at the BRK AGM
Investing Articles

With a spare £30 a week, I’d use the Warren Buffett approach to building serious passive income!

By learning some lessons from billionaire investor Warren Buffett, this writer aims to build passive income streams using modest regular…

Read more »

Investing Articles

If I’d invested £10k in the FTSE 100 25 years ago, here’s what I’d have today

Has the FTSE 100 been a winner over the last 25 years? Muhammad Cheema takes a look at this and…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

I’d aim for a million buying just 9 or 10 shares

Our writer explains why he believes careful selection of not that many quality blue-chip shares could help him aim for…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

£7,000 in savings? Here’s how I’d aim for almost £2,000 a month in passive income

With only a few thousand in savings and £100 to invest a month, our writer considers a strategy to aim…

Read more »