Flutter Entertainment Share Price soared yesterday after the company announced that it was considering spinning-off FanDuel, the giant American sports betting group. Flutter’s stock closed at 16,895p, which was slightly above last year’s high of 16,310p and slightly below yesterday’s high of 17,025.
What happened: Flutter Entertainment has been a top achiever in the FTSE 100. The company’s share price has jumped by more than 243% from its lowest level last year, bringing its total market cap to more than $11 billion.
Flutter has benefited substantially from the pandemic. Indeed, late last year, it became an acquisition target when America’s MGM launched an unsolicited offer that pushed the stock to an all-time high. The firm rejected the offer, saying that it undervalued it. This pushed its stock lower by almost 20%.
Now, it seems like the management has been vindicated since the stock has moved above where it rose to after the offer was announced. The latest jump happened after the firm said it was considering spinning-off Fanduel, a company that has a market share of about 40% in the United States. The firm said:
“Flutter regularly evaluates its organizational and capital structure to assess how best to position itself to deliver upon the group’s strategy. Should a decision be made to proceed with a listing in due course, an announcement will be made as appropriate.”
Spinoffs have become popular ways by companies to realize shareholder value. For example, PayPal is now significantly bigger than eBay, a company that used to own it a few years ago. Other popular spinoffs are Match Group and Carrier Global.
Flutter share price forecast
A closer look at the Flutter share price daily chart reveals that the stock has been in a strong upward trend. Recently, it has formed a cup and handle pattern, which is usually a sign of continuation. Indeed, in the rally yesterday, the company managed to move above the upper side of the cup. It is also above the 25-day and 15-day moving averages (MAs).
Therefore, while a pullback (handle) is possible, the shares will likely continue rising as bulls target the next key resistance at 17,500p. However, a drop below the lower side of the cup at 13,255p will invalidate this trend.
Flutter Entertainment Share Price