Input your search keywords and press Enter.

IGT Sees Price Drop

Move such as getting VR Archery Tournaments in Las Vegas are just the tip of the iceberg for IGT. However, after their first quarter results were released their stock price dropped.

Analysts do not believe the price drop should have been as drastic as it was.

The drop is attributed to a second round of 13.2 million shares being made available to the public.

The Background on IGT

In May, International Game Technology showed first quarter earnings as $1.21 billion, which was a five percent increase based on a year to year examination. The company also stated they had a 65 percent increase in their operating revenue, which reached $197 million. Despite the gains, the company say its stock slide 16.2 percent. The May high was 30.59 before it dipped to 25.64. The fall happened after an Italian announcement.
It seems a bit of a political uncertainty with moving into Italy may be port of the problem with IGT stock. Analysts with Deutsch Bank Securities like many financial analysts believe people overacted in dumping their stock and lowering the value.

Carlo Santarelli and Danny Valoy are the two voices behind the outcry that the drop was overdone. They feel the price drop should not have occurred. However, they did cite the 13.2 million second offering of shares, the euro value concerns, and the Italian government regulation as three of the reasons the stock might have dipped. They also stated that there are more trading-oriented shareholders, who come in to make a buck and then leave.
The euro has softened against the dollar, which should have no impact on the company stock. It is more of a translation impact than a cash to cash flow issue. The debt that IGT has is in euros, so the debt is declining against the USD, in other words $35 million for every 0.01 euro is how the debt is declining as the euro moves lower.

The main concern is Italy’s desire to clean up crime which can relate to casinos. In 2007, the financial crisis took a big chunk out of Italy. There have also been some talks that Italy will follow suit behind the UK and leave the EU. With all the political talk, there seems to be a rebound in IGT stock. Carlos Cottarelli, the Prime Minister, is attempting to keep the country stable by stating that the legislators are looking for ways to help the economy and keep the country stable.

Julie Moraine

With 4 years experience as an analyst, Julie—or ‘Jewels’, as we aptly refer to her in the office—is nothing short of a marvel-worthy in her attention to the forex and cryptocurrency space as she quickly became the first pick to co-pilot education to the masses with Mike.