PLAYSTUDIOS, Inc. (NASDAQ:MYPS) CFO Scott Edward Peterson has sold a portion of his company shares, according to a recent SEC filing. The transaction, which took place on September 16, 2024, involved the sale of 25,000 shares of PLAYSTUDIOS Class A Common Stock at a weighted average price of $1.58 per share, totaling approximately $39,500.
The sale was conducted under a Rule 10b5-1 trading plan, which Peterson had adopted on June 13, 2024. This type of plan allows company insiders to establish pre-planned transactions at a time when they are not in possession of material non-public information, providing a defense against potential allegations of insider trading. The details of this trading plan were previously disclosed in the company's Quarterly Report filed on August 6, 2024.
It is noted that the shares were sold at varying prices ranging from $1.55 to $1.65. The CFO has agreed to provide full information regarding the number of shares sold at each price within this range upon request from the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission.
Following this transaction, Peterson still holds a substantial number of shares directly and indirectly. The direct holdings by Scott E Peterson Trust amount to 608,998 shares of Class A Common Stock post-transaction. Additionally, the reporting documents indicate that Peterson's spouse owns 33,874 shares. However, Peterson disclaims beneficial ownership of these shares, and their inclusion in the report does not equate to an admission of beneficial ownership for legal purposes.
Derivative securities such as Restricted Stock Units, Performance Stock Units, and various Stock Options remain part of Peterson's overall compensation and investment in PLAYSTUDIOS. These holdings represent potential future ownership of Class A Common Stock, contingent upon certain conditions such as vesting schedules and performance metrics.
Investors and followers of PLAYSTUDIOS will continue to monitor insider transactions as they can provide insights into executive confidence and company performance. The recent sale by the CFO will be of interest to those keeping a close eye on the company's financial leadership activities.
In other recent news, PlayStudios reported a 7% decrease in net revenues for Q2 2024, totaling $72.6 million, despite a significant increase in daily active users and the successful launch of new games. The company's consolidated adjusted EBITDA dropped to $14.1 million, with an improvement in adjusted EBITDA margins. Amid growing competition in the iGaming industry, PlayStudios' stock rating was downgraded from a Buy to a Hold status by Craig-Hallum, and the company revised its revenue guidance for 2024 downwards.
The gaming company's outlook for growth involves enhancing its casual game portfolio through improved monetization strategies, particularly in advertising. Oppenheimer maintains its Outperform rating and $6.00 price target on PlayStudios, anticipating the expansion of the Tetris franchise and innovative gameplay through various game variants.
Despite the challenges, PlayStudios maintains a strong balance sheet with $106 million in cash reserves and continues to make strategic decisions regarding capital allocation. These are the recent developments for PlayStudios.
InvestingPro Insights
In light of the recent insider sale at PLAYSTUDIOS, Inc. (NASDAQ:MYPS), investors might seek additional context to better understand the company's financial position and prospects. According to InvestingPro data, PLAYSTUDIOS has a market capitalization of $206.94 million, which reflects the company's valuation in the market as of the last reported period. Despite a challenging period, the company has demonstrated a high gross profit margin of 74.82%, indicating a strong ability to retain revenue after the cost of goods sold is accounted for.
InvestingPro Tips suggest that management's aggressive share buyback strategy and the company's position of holding more cash than debt are indicators of financial prudence and a potential bullish signal to investors. Additionally, analysts predict that PLAYSTUDIOS will be profitable this year, which could be a turning point for the company's financial performance. For those interested in a deeper dive into the company's metrics, InvestingPro offers additional tips, with a total of 11 available for PLAYSTUDIOS at https://www.investing.com/pro/MYPS.
Lastly, the InvestingPro Fair Value estimate stands at $2.46, which is higher than the recent closing price of $1.68. This discrepancy could suggest that the stock is currently undervalued, providing a potential opportunity for investors. As the next earnings date approaches on November 6, 2024, market participants will be watching closely to see if the company's financial results align with these positive indicators.
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