Investment in Sports Sector Spikes to 3.5-Year Peak Thanks to Rush Street and Rogers' Influence
In the dynamic world of technology and sports, July 2022 saw a mix of fortunes for several key players. While some companies experienced growth, others faced challenges.
The Sportico Sports Stock Index, a basket of 40 stocks that rely on sports for a significant portion of future growth, advanced nearly 2% in July. Reaching its highest level since late 2021, the index is a testament to the resilience of the sports-tech sector.
One of the notable performers was Rush Street Interactive (RSI), which leapt 26% in July. This marks the highest level for the company since the end of 2021. Jefferies analyst David Katz wrote that ongoing enhancements across both iCasino and Online Sports Betting platforms are fueling deeper user engagement for Rush Street Interactive.
On the other hand, Ferrari (RACE) faced a significant setback, losing 11% in July due to a plunge Thursday after announcing earnings. The Italian luxury car manufacturer's shares lost 10% on the day, their worst showing since the company debuted on the stock market nine years ago. Slowing sales of Ferrari's luxury cars spooked investors, despite the company reporting benefits from lower costs and better performance with its Formula 1 team.
The tech-heavy Nasdaq Composite index rallied nearly 4%, and the S&P 500 gained more than 2%. Among the companies benefiting from this general tech rally was Rogers Communications (RCI), which advanced 13% in July. Management sounded a bullish note on revenue from the Toronto Blue Jays and the acquisition of the majority of Maple Leaf Sports and Entertainment. CEO Tony Staffieri also mentioned potential alternatives for the company, including private investors, IPO, or spin-out.
TopGolf Callaway Brands (MODG) gained 15% in July, with interest on social media and chatboards rising as retail investors anticipate the spinoff of TopGolf. The index, which is equal weighted, meaning each stock starts off as 2.5% the value of the overall benchmark, closed July at 1,522 after touching a peak of 1,573 last week.
Vivid Seats (SEAT) lost 10% of its value in July, with revenue expected to decline 16% in 2025 according to S&P Global Market Intelligence. The index, which includes sports teams and leagues such as Manchester United (MANU), sneaker makers including On Holding (ONON), and media companies such as Paramount (PARA), continues to be a barometer for the sports-tech sector's growth.
As we move forward, these companies will undoubtedly continue to shape the intersection of technology and sports, offering exciting opportunities and challenges for investors and fans alike.
- Sports betting and finance are intertwined in the case of Rush Street Interactive (RSI), as ongoing enhancements across their iCasino and Online Sports Betting platforms are driving increased user engagement, leading to a 26% jump in July.
- Investing in high-tech companies, such as Rogers Communications (RCI), can also yield significant returns, as the company advanced 13% in July, thanks to a positive outlook on revenue from the Toronto Blue Jays and the acquisition of the majority of Maple Leaf Sports and Entertainment.
- The stock-market performance of sports-related firms, like TopGolf Callaway Brands (MODG), can be influenced by retail investor sentiment, as evidenced by the 15% gain in July, sparked by anticipation of a TopGolf spinoff on social media and chatboards.
