Sportradar denied allegations from two admitted short sellers as its stock dropped more than 22% on Wednesday.
Both reports suggested up to 40% of the sports betting data supplier’s revenue may come from unregulated markets, which could jeopardize its licenses in regulated markets. A Sportradar spokesperson shared the following statement with LSR before sending it to shareholders roughly half an hour before the market closed.
“Short reports issued today contain several factual inaccuracies about Sportradar, and we unequivocally challenge these assertions,” reads the statement.
“These reports demonstrate a fundamental misunderstanding of our business and the industry and were authored by short sellers trying to erode shareholder value and profit from stock disruption.
“Sportradar works exclusively with licensed operators, follows strict global compliance, and due diligence standards, and we stand by our independently audited financial statements, risk disclosures, and information provided to investors and regulators.
“We conduct our business with the highest ethical standards consistent with Sportradar’s policies and applicable laws and regulations.”
Sportradar stock hits 52-week low
SRAD tumbled 22.6% to $13.04 on nearly 11 times its average daily volume.
That is a new 52-week closing low and the lowest price since the stock closed at $12.65 in November 2024.
Wednesday’s closing price is 59% off SRAD’s all-time closing high of $31.79 hit last August.
Sportradar will report its Q1 earnings on May 6.
Opportunity to buy Sportradar stock?
Jeffrey Stantial of Stifel said checks with former employees said allegations of revenue from illegal markets are “being massively over-estimated” and called Wednesday’s dip a buying opportunity.
Stantial, who rates SRAD at buy with a $25 target, said the company’s alleged unregulated market exposure is “anecdotally well-known by now.” The selloff was likely due to the “curiously similar revenue exposure estimations,” he added.
“More work is needed on our end to investigate whether there are actual commercial agreements in place with illegal operators cited in the reports, though our initial read is we think many of these can be explained by legacy IPO relationships that have since been terminated, or else the illegal data/product ‘scraping/stealing’ ecosystem that is well-known to exist in the OSB industry,” Stantial said. “This is consistent with our own separate checks.”
Stantial also noted the size of Wednesday’s drop compared to last November when another short report was released, leading to a 3% drop.
The short reports came from X, with the first report published at 8:30 am Eastern and the second report published around noon.
