Published: January 4, 2025, 07:00h.
Last updated on: January 4, 2025, 02:24h.
Flutter Entertainment (NYSE: FLUT) has begun its $5 billion share repurchase program with the buyback of approximately 9,600 shares on the last trading day of 2024.
This was followed by the repurchase of over 13,000 shares on January 2, marking the first trading day of 2025. Goldman Sachs conducted the buybacks on the open market on behalf of the Dublin-based gaming company. Flutter had announced its plans to start buying its own stock in November.
The redemptions are part of Flutter’s commitment to repurchase Ordinary Shares of up to $350 million by March 31, 2025, following the share buyback program announcement on November 13, 2024, and as part of the overall plan to repurchase $5 billion of shares announced on September 25, 2024,” according to a statement.
After the repurchase activity, the parent company of FanDuel will have 177,881,080 ordinary shares in circulation.
Flutter Finding Value in Buybacks
Flutter closed at $256.76 on Friday, nearly 10% below its 52-week high of $284.79. The gaming company is seeing value in its shares based on the spread between the 52-week high and the repurchase prices.
On December 31, the repurchased Flutter stock ranged from $256.26 to $260.08. By Thursday, that range had shifted to $254.96 to $260.04. While companies are not required to repurchase the entire announced amount, if Flutter proceeds with buying back $5 billion of its shares, it would represent a substantial portion of its market capitalization of $45.34 billion.
If Wall Street’s predictions are accurate, Flutter’s market value is expected to rise. Of the 22 analysts covering the stock, 20 recommend a “strong buy” or “buy,” with an average price target of $303.90, reflecting an 18.36% increase from the close on January 3.
FanDuel is recognized as one of the most valuable gaming brands globally and in the US, where it forms an online sports betting duopoly with DraftKings (NASDAQ: DKNG).
Flutter’s Significant Buyback Plans
In September, the parent company of Betfair announced its intention to repurchase $5 billion of its shares over the coming years. This marked one of the largest buyback programs unveiled in the gaming sector in 2024 and was five times larger than the buyback plan announced by competitor DraftKings a month earlier.
Flutter’s decision to return capital to shareholders through a repurchase program is its first such move since listing on the New York Stock Exchange (NYSE) in early 2024. Last year, the company shifted its primary listing to the US.
This move has helped to expand Flutter’s investor base, particularly among US market professionals, while enhancing liquidity in its shares.