Date: 04.12.2023

by Antoni Majewski

888 Holdings Shares Tumble Following JP Morgan’s Downgrade

The share price of 888 Holdings, a prominent player in the gambling industry, experienced a notable decline this morning. This drop comes in the wake of a revised stock rating by JP Morgan, signaling a cautious outlook for the company.


888 Provides Trading Update and FY23 Guidance with Focus on Long-Term Growth iGamingExpress

JP Morgan downgraded 888 Holdings from ‘overweight’ to ‘neutral’, significantly reducing the target price for the stock from £1.50 to £0.97 per share. This adjustment had an immediate impact on the company’s stock value, leading to an almost 8% fall in share price from £0.748 to £0.704.

A Five-Day Decline and Underlying Causes

The company’s shares have been on a downward trajectory, with a total decline of 14.8% over the past five days. This negative trend has been ongoing since mid-September, following the company’s announcement that its Q3 2023 revenue would be 10% lower than the previous year. 888 Holdings attributed this downturn to several factors, including customer-friendly sports results, new compliance changes in dotcom markets, and the impact of safer gambling changes in the UK.

The company’s October Q3 report confirmed the earlier predictions, further solidifying the challenging situation faced by 888 Holdings.

Regulatory Challenges and Management Changes

The business has also been grappling with significant regulatory issues throughout the year. These began with the resignation of CEO Itai Pazner in January following an internal investigation into AML (Anti-Money Laundering) and KYC (Know Your Customer) failures in Middle Eastern VIP accounts.

Additionally, the Gambling Commission initiated a review of 888’s license in July, coinciding with a bid by FS Gaming to appoint former GVC Holdings chief Kenny Alexander as CEO. The Commission’s concerns stemmed from an ongoing HMRC investigation into historic allegations of bribery in Turkey during Alexander’s tenure at GVC, which resulted in a substantial financial settlement of £585 million.

Our Comment on the Article

The recent downturn in 888 Holdings’ share price is a reflection of the various challenges the company faces, both in operational performance and regulatory compliance. JP Morgan’s downgrade and the subsequent market reaction highlight the sensitivity of the gambling industry to both market and regulatory pressures. The ongoing scrutiny from regulatory bodies, coupled with internal management upheavals, paints a complex picture for the future of 888 Holdings.

This situation underscores the importance of stringent compliance measures and robust corporate governance in the highly regulated gambling sector. How 888 Holdings navigates these challenges will be critical in determining its long-term market position and investor confidence.