The global online gambling industry is estimated to register lucrative growth over the forecast period 2019-2025. Factors that augment the business growth of the market include high internet penetration coupled with the increasing use of mobile phones. Moreover, ease of access to online gambling, legalization & cultural approval, corporate sponsorships, and celebrity endorsements are further fueling the growth of the market. Apart from this, the growing availability of cost-effective online gambling mobile applications across the globe is also driving the market growth. The recent COVID-10 outbreak, which prompted several governments to prohibit social gatherings and announce full lockdown, has impacted a segmental performance of the industry.
Request a Free Sample of our Global Online Gambling Market: https://www.omrglobal.com/request-sample/online-gambling-market
The report analyzes the global online gambling market on the basis of type and geography. Based on the type, the market is segmented into sports betting, casinos, poker, and bingo.Sports betting contributes significant revenue to the global online gambling industry; however, it has been hit hard by the spread of the deadliest virus across the globe. Several sports events and tournaments including Indian Premier League (IPL) 13, UEFA Euro Cup 2020, Summer Olympics 2020 have been either postponed or canceled, providing a heavy blow to the several online sports betting companies. Further, amid the virus crisis and no sports tournaments or events in place, bettors are shifting to other gambling types such as pokers and casinos. Thereby, fueling the other segmental growth of the market.
A full Report of Global Online Gambling Market is Available at: https://www.omrglobal.com/industry-reports/online-gambling-market
The global online gambling market is analyzed on the basis of the geographical regions that are contributing significantly towards the growth of the market. The market has been segmented into North America, Europe, Asia Pacific and Rest of the World (RoW). Europe is expected to be the major region in the global online gambling market owing to the legalization of gambling in countries such as France, Germany, Spain, and Italy. Moreover, other factors that fuel the regional business growth include the significant presence of major players, such as William Hill PLC, Cherry AB, 888 Holdings PLC, and several others in the region; and high penetration of the internet coupled with the high smartphone penetration across the region. Asia-Pacific is estimated to be the fastest-growing region in the global online gambling market due to the growing use of internet services and the relaxation of regulations pertaining to online betting & gambling.
Global Online Gambling Market Segmentation
· Type
· Sports Betting
· Casinos
· Poker
· Bingo
Regional Analysis
· North America
· United States
· Canada
· Europe
· UK
· Germany
· Italy
· Spain
· France
· Rest of Europe
· Asia-Pacific
· China
· India
· Japan
· Rest of Asia-Pacific
· Rest of the World
Companies Studied
· 888 Holdings PLC
· Bet365 Group Ltd.
· Betsson AB
· Cherry AB
· GVC Holdings PLC
· Kindred Group PLC
· Ladbrokes Coral Group PLC
· Flutter Entertainment PLC
· The Stars Group Inc.
· William Hill PLC
For More Customized Data, Request for Report Customization @ https://www.omrglobal.com/report-customization/online-gambling-market
About Orion Market Research
Orion Market Research (OMR) is a market research and consulting company known for its crisp and concise reports. The company is equipped with an experienced team of analysts and consultants. OMR offers quality syndicated research reports, customized research reports, consulting and other research-based services.
For More Information, Visit Orion Market Research
Media Contact:
Company Name: Orion Market Research
Contact Person: Mr. Anurag Tiwari
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https://www.otcmarkets.com/stock/WNRS/news/Winners-Subsidiary-VegasWINNERS-Names-Howard-Lefkowitz-Former-CEO-of-VEGASCOM-and-Senior-Executive-at-Earthlink--Home-Sh?id=287012
LAS VEGAS, NV / ACCESSWIRE / January 21, 2021 / Winners, Inc. (OTC PINK:WNRS) subsidiary VegasWINNERS Inc., which provides sports betting enthusiasts with high quality analysis, research, data, guidance and professional advice, announces the hire of Howard Lefkowitz, former CEO of VEGAS.com and senior executive of Earthlink and Home Shopping Network as its President.
Lefkowitz brings to VegasWINNERS considerable marketing and technical experience in Internet business, television, and film. He served as vice president of business development and marketing for Earthlink. He worked with Dick Clark Productions to bring the first interactive primetime show to network TV. He also worked with Ted Turner's WTBS to create that station's first original show. A well-respected entertainment industry visionary, Lefkowitz has also consulted for NBC, CBS, ABC and Fox, as well as Warner Bros and MCA/Universal. Lefkowitz was also a senior executive at multichannel retailer HSN, and later served as president of one of the multibillion-dollar company's subsidiaries. During his nine-year tenure as president and CEO, VEGAS.com became the most visited and successful site for city hospitality and information on the web. Under his leadership VEGAS.com became a highly profitable, globally renowned brand with sales of nearly $400 MM annually. VEGAS.com grew to millions of unique visitors per month and operated back-of-house systems, including box offices, for many of the largest hotels in Las Vegas.
Mr. Lefkowitz will lead monetization, marketing, technology and day to day operations of VegasWINNERS.
Wayne Allyn Root, CEO of VegasWINNERS stated, "Howard has been my friend and neighbor for nearly twenty years. His expertise across multiple industries and disciplines, combined with his rich history of innovation and leadership will be of tremendous value to VegasWINNERS! We are delighted to have him on our winning team."
Last year, Grand View Research reported that in 2019 the global online gambling market size was valued at USD 53.7 billion and that they expected it to grow at a compound annual growth rate (CAGR) of 11.5% from 2020 to 2027. Later they projected revenues in 2027 to reach $127.3 billion by 2027. Active companies in the market include DraftKings Inc., Playgon Games Inc., Scientific Games Corporation, Landcadia Holdings II, Inc. and Penn National Gaming, Inc.

Conducted by ANON A review on what to expect from this up and coming project
Can be found on coingecko.
Within this post/document it will cover what $ACED & AceD as a whole is, what to expect, and questions you guys have asked alongside information on the current online gambling statistics for the world, especially sports betting.
> The reason I have gone to this effort is because I have never seen such a low MC project have so much potential, this is unironically a gem. I truly hope you all see the value in this. LONG READ.
What is $ACED and Acedbet.io?
> 500k MC at this current time of posting
> Ethereum-based Token Tokenomics, Symbol: $ACED, Decimals: 18, Type: ERC-20 Token, Total Supply: 200 Million AceD, Circulating supply: 190 Million AceD
> This IS A FULLY WORKING RPODUCT. They advertise: Multi Crypto, Sports & Esports, Fair Odds, and Full Anonymity for all betters.
> AceD bases its fundamentals in providing an alternative to existing centralized systems through the blockchain. Other than most cryptocurrencies that just provide anonymity, AceD plans on developing a privacy-orientated platform where the possibilities are endless. AceD’s mission is to provide online world class entertainment options while providing a secure and private platform.
> Multi Crypto Sportsbook, AceDBets, is a newly launched sportsbook that aims to provide a superior user experience. Custom-designed from the ground up, AceDBets combines a smooth, streamlined interface with social features that enable interactions with fellow cappers.
> “Our goal is to develop an appealing product that betters can enjoy, fair betting experience with 0 downtime. Place a bet from anywhere in the world, totally anon compatible on any device. Demand will increase with improvements. Poker will also be a major driver.”
What the original AceD and the recent move to being a ERC-20 Token? why it happened:
> “AceD started out in June 2018 as a POS/Masternode coin. We decided to swap to ethereum chain in June 2020. Some bad characters were exploiting the chain stealing masternode rewards and selling them on exchange. Updates were too costly with centralized exchanges so the move to ethereum chain was the direction we agreed on. So basically, the main reason why we moved to Ethereum chain is to focus on product development and not worry about blockchain issues. We have Vitalik looking after our chain, no need to develop a blockchain ourselves.”
Did any tokens get lost?
> I asked about this and they said the 200million listed on etherscan is the full amount. Investors initially assumed that tokens were lost originally with the swap, but that is not the case.
The major thing a lot of you guys wanted to know about were the Team, Whitepapers and Roadmaps:
> “Expect team info to be available within the new couple days. Whitepaper draft has already started alongside roadmap, expect publishment within 2 weeks or so.”
> “We also plan to hire more staffing to fill the downtime as our userbase is increasing rapidly need to adapt with demand Over 1200 users signed up total. The total amount of team members we have is 10 (6 developers).”
I asked about bingo not working after being advertised as working, got a nice response, good to see priorities being taken care of:
> “Bingo has been taken offline temporarily; we’ll revisit the product as it requires some attention. AceDbets.io/sports betting is our primary focus right now.”
Considering live sports betting is the only thing running at the moment, what is the current daily, weekly, total wagered through you guys, how do the tokens get redistributed?
> “We shared a chart showing steady growth in bets over the past 3 months. Betting volume is out the roof this month, NBA resumes next week expecting even bigger volumes to roll in with major sports resuming. July numbers will be shared in 3-4 days. Currently there is no dividends model for users, the bankroll profits help fund development and future marketing goals.”
I find that last part interesting, could potentially be implemented as a system to reward staking if it were introduced. Hmm.
​
​
ACED and their future. What they plan on doing with Acedbet.io and their product as a whole.
What is there to look forward to in the next upcoming update, Any set time release? (This is in relation to the website and the extra features they plan to add to their sports betting. I have seen a lot of people comment on it.)
> “No firm date for the update, however we’re in the final stages of testing. It is a massive update for our platform need to ensure everything is down right and functional before we make the transition. Always room for improvement, the new update has many changes which will improve the user experience. We will continue to make changes, always listening to feedback and suggestions from our community.”
> “Support desk is being introduced along with update, where users will have access to knowledge tools, how to use acedbets, understanding betting odds, rules for events and quick support with ticketing system.”
> “in the near future we plan to introduce betting and bankroll management tracking tools. to help a better understand their track record.”
> “Updates will be provided in stages, we find that a more effective approach instead of blasting one big update every few months.”
This update is essential for the QOL of this product, the team seems to be absolutely working their arses off.
Ok, onto the future updates then:
THE BIG QUESTION? WHEN POKER?
> “Focus is on acedbets.io right now. There are not many bugs left, one major one with All IN freeze up issue and then a bunch of minor visual bugs that need to be ironed out. This will be revealed in our roadmap, we hope to have the product live in Q42020. It’s 80% complete with a few user facing bugs that will be addressed when we resume development in August.”
> “After poker, we will be adding more games to the platform such as Keno, Bingo, Roulette, Blackjack. Considering adding live dealers as well.”
WHEN STAKING?
> “Staking on platform will be introduced eventually not sure of the timeline for this. We would have a community vote on how to fund the staking model, a certain amount of coins could be minted for example to support long tem staking.”
I personally find this part to be interesting, if they manage to pull off a staking + betting crypto site, where potentially dividends could be paid off to stakers, etc. it would be crazy, never seen anything like this.
WHEN EXCHANGE?
> “Waiting for IDEX to reply, we have followed up and our listing request is now with their manager for review. We are actively seeking new exchanges and will find a better alternative to graviex very soon. IDEX application submitted, being reviewed by their listing manager.”
WHEN MARKETING?
> “We will be ramping up marketing after our acedbets.io update. Social media, influencers, AMA’s podcasts, some fun contests, publishing articles on major crypto sites, telegram and discord server promotions, partnerships.”
WHEN WILL YOU MAKE BLOG POSTS AGAIN?
> We will be appointing 2 team members to handle our social media profiles. This includes our medium account. All information will be available on acedcoin.com and medium.
I am unsure of anymore future updates as they have said they do not want to make too many promises. I believe with the roadmap release we will be able to get a grand idea of the project. PLEASE DO NOT BE AFRAID TO JOIN THE DISCORD AND SUGGEST IDEAS, THEY LOVE ALL INPUT AND TAKE IT SERIOUSLY.
​
Why bother investing in this?
> How about you guys have a look at the online gambling market predictions for the next 10 years…
> “The global online gambling market size was valued at USD 53.7 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 11.5% from 2020 to 2027. The high internet penetration and increasing use of mobile phones among individuals for playing online games from their homes and public places are driving the market.
In addition, factors such as easy access to online gambling, legalization and cultural approval, corporate sponsorships, and celebrity endorsements are also contributing to market growth. The growing availability of cost-effective mobile applications across the globe is further expected to fuel market growth.”
THIS PUTS A $104B VALUATION EXPACTATION FOR 2025.
IT THEN GOES ON TO SAY THIS: > “ The growing number of sports followers across the globe has fuelled the demand for sports betting. The majority of bets are placed on boxing, baseball, football, and hockey sports, which is, in turn, driving the market.
Increasing the development of new technologies such as virtual reality and blockchain is also driving the growth of the industry. This may be attributed to the fact that several companies are now integrating the blockchain technology into their online gambling business. This helps them ensure transparency in gambling activities and offer enhanced user experience. In addition, blockchain-based gambling platforms are completely decentralized and are free of third-party influence.”
They LITERALLY KNOW AND INCLUDE BLOCKCHAIN in their report. THEY KNOW IT WILL BE A BIG INFLUENCE IN YEARS TO COME. Even with COVID-19, AceD covers every sport you could think of that would be running right now, it even has E-Sports. This market prediction, alongside the ACED betting website WITH FULL ANONYMITY… This is going to blow. Once more betting options are released too, especially live poker. Man, you guys better be ready, do not complain about not getting in. I have laid this all out for you, now the choice is yours.
The closest thing that even compares to $ACED is 25mc, and then the next is 40mc. Neither have Anonymous gambling. Once $ACED gains more features, they will be far ahead of these other platforms.
​
EXTRAS
What are you current biggest draw backs? what is stopping you guys from really excelling and achieving these visions faster?
> “Funding, our goal is to build a self-sustainable model with acedbets.io and we are well on our way to achieving this. We would also like to introduce more entertainment options such as live streaming with tip functionality. With our growing userbase I think we can attract a lot of streamers to use our platform to share their content. In order to achieve these, we can have community votes on coins being minted and offered as OTC crowd sale.”
Legal troubles, could this happen with the anonymous betting? Once you guys do pop off and blow up, will this bite you? I don’t personally see a reason for it to but please explain if there would be.
> “Currently, we don’t offer betting in fiat currencies, our platform is strictly crypto therefore a gaming license is not required to operate in this space. However, if need be we are prepared to comply with any changes and a gaming license would be obtained if required.”
If the site does get hacked or anything happens, how safe are everyone’s funds? Sorry if this is rather random it’s just good to know.
> “All funds deposited into acedbets.io are moved over to cold storage. We only keep a small threshold to payout daily withdrawals which is replenished on a daily basis.”
Wtf went on with DGN? saw a lot of fud > “I was in touch with Bubba-Degen (founder of DGN) , announcement was made on their discord. The FUD started due to couple members requesting a refund and were unhappy with the announcement of launch date being extended to upcoming Friday. The 2 guys went ahead and started spamming telegram groups with false information and accusing DGN as scammers. The DGN token will be listed on acedbets.io this weekend and the project will be live be going live on Uniswap on Friday. “

Global Online Gambling Market Report 2020 aims to offer in-depth information about the Online Gambling industry with market evaluate, key developments, enterprise plans, and future possibilities of the industry. It entails the modern marketplace popularity with some changing trends that can affect the Online Gambling market boom rate. The report covers the major growth prospect over the Online Gambling market forecast period. It also comprehends market new product analysis, economic assessment, strategies, and Online Gambling advertising and marketing traits. The report also offers a top level view of revenue, sales, product call for, and supply of data, cost, and increase analysis for the global and nearby levels.
Global Online Gambling market 2020 studies affords a basic evaluation of the industry which includes definitions, classifications, applications, and enterprise chain structure. The Global Online Gambling market analysis is supplied for the international markets together with development tendencies, aggressive landscape analysis, and key regions development popularity. Development regulations and plans are discussed as well as manufacturing processes and fee structures also are analyzed. This record also states import/export consumption, deliver and demand Figures, price, price, revenue, and gross margins.
To Read More: Online Gambling Market Report

Positions: $RSI 30 03/19 30C
Proof: https://imgur.com/a/swCCMjz
​
*This post is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice.*
​
TLDR: Rush Street Interactive ($RSI) is the #1 nationwide online casino company and the #3 or #4 sports book depending on the state. Short selling, unwarranted institutional wariness of share dilution and the general market focus on sports book instead of online casino has left $RSI grossly undervalued. A massive blow out at Q4 earnings will result in analyst upgrades and a rapid repricing by market makers and institutions seeking exposure to the emerging sector.
​
**Overview**
"Sports book is really just kind of a warm up in a lot of ways for an online casino where the real money is made" - Niccolo De Masi, CEO dMY technologies
​
Rush Street Interactive ($RSI) operates the BetRivers.com online casino and sports book. They are now fully licensed and operating in New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Iowa, and Virginia. They own and operate a casino in New York and already have a New York license making them well positioned for liberalization there. They merged with a dMY Technology Group SPAC on Dec. 31st 2020 with 240 million on the balance sheet to spend on growth.
The online casino business is fundamentally more profitable than sports betting because the average value of a casino player is estimated at $600 while a sports book player could be as little as $20. Estimates put the online casino market at DOUBLE the size of the online sports book market and the online casino industry is really just getting started as more states liberalize.
$RSI is expert at new market entry; they have been first to market in Pennsylvania, Illinois, Indiana, and Colorado and even when they aren't first they are capable of capturing market share in competitive markets such as New Jersey. They also have products which women play which accounts for at least half of the market in online casino. The female market is one that the pure sports book plays miss out on.
Also for some fucking reason they operate a casino and sports book in Colombia (rushbet.co) and may make large expansions into other parts of south America as legalization continues. This means they have the expertise necessary for global expansion in the future although the states remains their primary focus and growth driver.
​
**The Financials and Strategy**
Unlike other companies in the space Rush Street is already profitable in 2020 and has a strong focus on Return On Invested Capital (ROIC). Q3 gross revenue was $71.9 Million. Q4 revenue is going to be a blow out. Combing through state gambling revenue data and breaking that down by market share my estimate is that Q4 revenue could be as high as $120 Million.
Paired with this blow out will be a **guidance raise to $500 Million for 2021**, which is 2/3 of DraftKings 2021 guidance of $750M.
https://imgur.com/a/xkfcayC
​
What is striking when compared to $DKNG is that their advertising spend was only a quarter of revenue in Q3 while $DKNG spent 155% of their revenue. This will change as they begin to focus on growth, but it shows they are very good at getting return on ad spend. This company should actually be valued close to $DKNG based on growth potential once guidance is raised.
https://imgur.com/a/RQQXtGg
​
Their focus on attracting **female gamers** is also important to their long term growth potential. The sports book plays with cross sells to casino such as $DKNG will not be able to grow through the female demographic in the same way. **This cannot be understated** as one of the major strategic advantages of $RSI.
https://imgur.com/a/xzJj26n
​
As I said before I expect their trend of rapid growth to continue for Q4 earnings, certainly going to be a blow out based on looking at state gambling revenue numbers. My estimate is that their revenue will be around 110M for Q4. I also expect guidance to be raised to 500M for 2021 due to strong performance in existing markets and the recently opened Michigan market as well as their sports book launch in Virginia.
https://imgur.com/a/ckTqHhh
​
**Short sellers have entered the chat**
The short interest on $RSI sits at 5.08 M shares as of 01/14/21 representing a 30% increase. Now why would a company already valued at 2.8 Billion and with a comparative valuation of 8-10 Billion compared with $DKNG and $PENN be so heavily shorted at such a low market cap? My conclusion is that an institution with 10s of millions to throw at shorting this stock wants to take advantage of fear of share dilution from warrant calling or to establish a better entry prior to earnings.
​
**Commander in GILF Cathie Wood is Bullish on the sector**
On Feb. 2nd ARK disclosed that they had purchased 620,300 shares of $DKNG. This is extremely bullish for the sector. I am highly confident that after Q4 earnings ARK will be purchasing shares in $RSI as well due its strategic advantages relative to $DKNG and exposure to the female demographic. For such a small market cap company this will be a major catalyst.
​
**Institutions are bullish**
Fidelity has increased their holdings to 14% as of today: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/8f10b0d8-a3d2-447c-bc75-87587d0a4670.pdf
Alliance Bernstein holds a 6% position reported today: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/e883778d-e759-4a85-91c1-3242ed110720.pdf
​
**Final notes**
Jerome "The Bus" Bettis, Steelers legend and hall of fame running back, is their brand ambassador... This company knows their target audience and how to appeal to them, likely more 'classic' ambassadors to come to attract even more boomer and Gen X degenerates. Keep in mind these are the gamblers with big money to spend, the average age of an online casino gambler is 42.
This stock has been grossly underpriced due to short selling. The terms of the SPAC deal were not unfavorable and all the insiders held their shares through the merger banking on growth in the market - **management owns 77% of the company**. This is a true value play on a well managed company in an emerging industry with a market size in the hundreds of billions. I plan to hold shares long term.
​
I will post a part 2 breaking down their latest S-1 filing and Q4 revenue by state when they release their Q4 earnings date.
​
Do your own research.
References:
https://www.legalsportsreport.com/sports-betting/revenue/
https://fintel.io/doc/sec-rush-street-interactive-inc-ex991-2021-january-05-18632-947
https://s26.q4cdn.com/794539746/files/doc_presentations/2020/RSI-Investor-Presentation-15-Oct-2020.pdf
https://ir.rushstreetinteractive.com/news/news-details/2020/RUSH-STREET-INTERACTIVE-ANNOUNCES-THIRD-QUARTER-2020-RESULTS-AND-RAISES-FULL-YEAR-GUIDANCE/default.aspx
https://www.youtube.com/watch?v=SQWEhWuPmzU
https://www.thestreet.com/investing/draftkings-surges-as-stake-bought-by-ark-next-generation
​
Positions: $RSI 30 03/19 30C
I will be adding 3/19 25cs each week until earnings.
Exit strategy: "What's an exit strategy?" - u/deepfuckingvalue

Positions: $RSI 03/19 30C
Proof: https://imgur.com/a/swCCMjz
This post is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice.
TLDR: Rush Street Interactive ($RSI) is the #1 nationwide online casino company and the #3 or #4 sports book depending on the state. Short selling, unwarranted institutional wariness of share dilution and the general market focus on sports book instead of online casino has left $RSI grossly undervalued. A massive blow out at Q4 earnings will result in analyst upgrades and a rapid repricing by market makers and institutions seeking exposure to the emerging sector.
Overview
"Sports book is really just kind of a warm up in a lot of ways for an online casino where the real money is made" - Niccolo De Masi, CEO dMY technologies
Rush Street Interactive ($RSI) operates the BetRivers.com online casino and sports book. They are now fully licensed and operating in New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Iowa, and Virginia. They own and operate a casino in New York and already have a New York license making them well positioned for liberalization there. They merged with a dMY Technology Group SPAC on Dec. 31st 2020 with 240 million on the balance sheet to spend on growth.
The online casino business is fundamentally more profitable than sports betting because the average value of a casino player is estimated at $600 while a sports book player could be as little as $20. Estimates put the online casino market at DOUBLE the size of the online sports book market and the online casino industry is really just getting started as more states liberalize.
$RSI is expert at new market entry; they have been first to market in Pennsylvania, Illinois, Indiana, and Colorado and even when they aren't first they are capable of capturing market share in competitive markets such as New Jersey. They also have products which women play which accounts for at least half of the market in online casino. The female market is one that the pure sports book plays miss out on.
Also for some fucking reason they operate a casino and sports book in Colombia (rushbet.co) and may make large expansions into other parts of south America as legalization continues. This means they have the expertise necessary for global expansion in the future although the states remains their primary focus and growth driver.
The Financials and Strategy
Unlike other companies in the space Rush Street is already profitable in 2020 and has a strong focus on Return On Invested Capital (ROIC). Q3 gross revenue was $71.9 Million. Q4 revenue is going to be a blow out. Combing through state gambling revenue data and breaking that down by market share my estimate is that Q4 revenue could be as high as $120 Million.
Paired with this blow out will be a **guidance raise to $500 Million for 2021**, which is 2/3 of DraftKings 2021 guidance of $750M.
https://imgur.com/a/xkfcayC
What is striking when compared to $DKNG is that their advertising spend was only a quarter of revenue in Q3 while $DKNG spent 155% of their revenue. This will change as they begin to focus on growth, but it shows they are very good at getting return on ad spend. This company should actually be valued close to $DKNG based on growth potential once guidance is raised.
https://imgur.com/a/RQQXtGg
Their focus on attracting **female gamers** is also important to their long term growth potential. The sports book plays with cross sells to casino such as $DKNG will not be able to grow through the female demographic in the same way. **This cannot be understated** as one of the major strategic advantages of $RSI.
https://imgur.com/a/xzJj26n
As I said before I expect their trend of rapid growth to continue for Q4 earnings, certainly going to be a blow out based on looking at state gambling revenue numbers. My estimate is that their revenue will be around 110M for Q4. I also expect guidance to be raised to 500M for 2021 due to strong performance in existing markets and the recently opened Michigan market as well as their sports book launch in Virginia.
https://imgur.com/a/ckTqHhh
Short sellers have entered the chat
The short interest on $RSI sits at 5.08 M shares as of 01/14/21 representing a 30% increase. Now why would a company already valued at 2.8 Billion and with a comparative valuation of 8-10 Billion compared with $DKNG and $PENN be so heavily shorted at such a low market cap? My conclusion is that an institution with 10s of millions to throw at shorting this stock wants to take advantage of fear of share dilution from warrant calling or to establish a better entry prior to earnings.
Cathie Wood is Bullish on the sector
On Feb. 2nd ARK disclosed that they had purchased 620,300 shares of $DKNG. This is extremely bullish for the sector. I am highly confident that after Q4 earnings ARK will be purchasing shares in $RSI as well due its strategic advantages relative to $DKNG and exposure to the female demographic. For such a small market cap company this will be a major catalyst.
Final notes
Jerome "The Bus" Bettis, Steelers legend and hall of fame running back, is their brand ambassador... This company knows their target audience and how to appeal to them, likely more 'classic' ambassadors to come to attract even more boomer and Gen X degenerates. Keep in mind these are the gamblers with big money to spend, the average age of an online casino gambler is 42.
This stock has been grossly underpriced due to short selling. The terms of the SPAC deal were not unfavorable and all the insiders held their shares through the merger banking on growth in the market - **management owns 77% of the company**. This is a true value play on a well managed company in an emerging industry with a market size in the hundreds of billions. I plan to hold shares long term.
I will post a part 2 breaking down their latest S-1 filing and Q4 revenue by state when they release their Q4 earnings date.
Do your own research.
References:
https://www.legalsportsreport.com/sports-betting/revenue/
https://fintel.io/doc/sec-rush-street-interactive-inc-ex991-2021-january-05-18632-947
https://s26.q4cdn.com/794539746/files/doc_presentations/2020/RSI-Investor-Presentation-15-Oct-2020.pdf
https://ir.rushstreetinteractive.com/news/news-details/2020/RUSH-STREET-INTERACTIVE-ANNOUNCES-THIRD-QUARTER-2020-RESULTS-AND-RAISES-FULL-YEAR-GUIDANCE/default.aspx
https://www.youtube.com/watch?v=SQWEhWuPmzU
https://www.thestreet.com/investing/draftkings-surges-as-stake-bought-by-ark-next-generation
Positions: $RSI 03/19 30C
I will be adding 3/19 25cs each week until earnings.
Exit strategy: "What's an exit strategy?" - u/deepfuckingvalue
Forgot to add: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/8f10b0d8-a3d2-447c-bc75-87587d0a4670.pdf Fidelity just doubled their position to almost 15%

NEW INFO 5 Results from share redemption are posted. Less than .2% redeemed. Very bullish as investors are showing extreme confidence in the future of PLBY.
https://finance.yahoo.com/news/playboy-mountain-crest-acquisition-corp-120000721.html
NEW INFO 4 Definitive Agreement to purchase 100% of Lovers brand stores announced 2/1.
https://www.streetinsider.com/Corporate+News/Playboy+%28MCAC%29+Confirms+Deal+to+Acquire+Lovers/17892359.html
NEW INFO 3 I bought more on the dip today. 5081 total. Price rose AH to $12.38 (2.15%)
NEW INFO 2 Here is the full webinar.
https://icrinc.zoom.us/rec/play/9GWKdmOYumjWfZuufW3QXpe_FW_g--qeNbg6PnTjTMbnNTgLmCbWjeRFpQga1iPc-elpGap8dnDv8Zww.yD7DjUwuPmapeEdP?continueMode=true&tk=lEYc4F_FkKlgsmCIs6w0gtGHT2kbgVGbUju3cIRBSjk.DQIAAAAV8NK49xZWdldRM2xNSFNQcTBmcE00UzM3bXh3AAAAAAAAAAAAAAAAAAAAAAAAAAAA&uuid=WN_GKWqbHkeSyuWetJmLFkj4g&_x_zm_rtaid=kR45-uuqRE-L65AxLjpbQw.1611967079119.2c054e3d3f8d8e63339273d9175939ed&_x_zm_rhtaid=866
NEW INFO 1 Live merger webinar with PLBY and MCAC on Friday January 29, 2021 at 12:00 NOON EST link below
https://mcacquisition.com/investor-relations/press-release-details/2021/Playboy-Enterprises-Inc.-and-Mountain-Crest-Acquisition-Corp-Participate-in-SPACInsider-ICR-Webinar-on-January-29th-at-12pm-ET/default.aspx
Playboy going public: Porn, Gambling, and Cannabis
!!!WARNING READING AHEAD!!! TL;DR at the end. It will take some time to sort through all the links and read/watch everything, but you should.
In the next couple weeks, Mountain Crest Acquisition Corp is taking Playboy public. The existing ticker MCAC will become PLBY. Special purpose acquisition companies have taken private companies public in recent months with great success. I believe this will be no exception. Notably, Playboy is profitable and has skyrocketing revenue going into a transformational growth phase.
Porn - First and foremost, let's talk about porn. I know what you guys are thinking. “Porno mags are dead. Why would I want to invest in something like that? I can get porn for free online.” Guess what? You are absolutely right. And that’s exactly why Playboy doesn’t do that anymore. That’s right, they eliminated their print division. And yet they somehow STILL make money from porn that people (see: boomers) pay for on their website through PlayboyTV, Playboy Plus, and iPlayboy. Here’s the thing: Playboy has international, multi-generational name recognition from porn. They have content available in 180 countries. It will be the only publicly traded adult entertainment (porn) company. But that is not where this company is going. It will help support them along the way. You can see every Playboy magazine through iPlayboy if you’re interested. NSFW links below:
https://www.playboy.com/
https://www.playboytv.com/
https://www.playboyplus.com/
https://www.iplayboy.com/
Gambling - Some of you might recognize the Playboy brand from gambling trips to places like Las Vegas, Atlantic City, Cancun, London or Macau. They’ve been in the gambling biz for decades through their casinos, clubs, and licensed gaming products. They see the writing on the wall. COVID is accelerating the transition to digital, application based GAMBLING. That’s right. What we are doing on Robinhood with risky options is gambling, and the only reason regulators might give a shit anymore is because we are making too much money. There may be some restrictions put in place, but gambling from your phone on your couch is not going anywhere. More and more states are allowing things like Draftkings, poker, state ‘lottery” apps, hell - even political betting. Michigan and Virginia just ok’d gambling apps. They won’t be the last. This is all from your couch and any 18 year old with a cracked iphone can access it. Wouldn’t it be cool if Playboy was going to do something like that? They’re already working on it. As per CEO Ben Kohn who we will get to later, “...the company’s casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth.” Honestly, I stopped researching Scientific Games' sports betting segment when I saw the word ‘omni-channel’. That told me all I needed to know about it’s success.
“Our SG Sports™ platform is an enhanced, omni-channel solution for online, self-service and retail fixed odds sports betting – from soccer to tennis, basketball, football, baseball, hockey, motor sports, racing and more.”
https://www.scientificgames.com/
https://www.microgaming.co.uk/
“This latter segment has become increasingly enticing for Playboy, and it said last week that it is considering new tie-ups that could include gaming operators like PointsBet and 888Holdings.”
https://calvinayre.com/2020/10/05/business/playboys-gaming-ops-could-get-a-boost-from-spac-purchase/
As per their SEC filing:
“Significant consumer engagement and spend with Playboy-branded gaming properties around the world, including with leading partners such as Microgaming, Scientific Games, and Caesar’s Entertainment, steers our investment in digital gaming, sports betting and other digital offerings to further support our commercial strategy to expand consumer spend with minimal marginal cost, and gain consumer data to inform go-to-market plans across categories.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tMDAA1
They are expanding into more areas of gaming/gambling, working with international players in the digital gaming/gambling arena, and a Playboy sportsbook is on the horizon.
https://www.playboy.com/read/the-pleasure-of-playing-with-yourself-mobile-gaming-in-the-covid-era
Cannabis - If you’ve ever read through a Playboy magazine, you know they’ve had a positive relationship with cannabis for many years. As of September 2020, Playboy has made a major shift into the cannabis space. Too good to be true you say? Check their website. Playboy currently sells a range of CBD products. This is a good sign. Federal hemp products, which these most likely are, can be mailed across state lines and most importantly for a company like Playboy, can operate through a traditional banking institution. CBD products are usually the first step towards the cannabis space for large companies. Playboy didn’t make these products themselves meaning they are working with a processor in the cannabis industry. Another good sign for future expansion. What else do they have for sale? Pipes, grinders, ashtrays, rolling trays, joint holders. Hmm. Ok. So it looks like they want to sell some shit. They probably don’t have an active interest in cannabis right? Think again:
https://www.forbes.com/sites/javierhasse/2020/09/24/playboy-gets-serious-about-cannabis-law-reform-advocacy-with-new-partnership-grants/?sh=62f044a65cea
“Taking yet another step into the cannabis space, Playboy will be announcing later on Thursday (September, 2020) that it is launching a cannabis law reform and advocacy campaign in partnership with National Organization for the Reform of Marijuana Laws (NORML), Last Prisoner Project, Marijuana Policy Project, the Veterans Cannabis Project, and the Eaze Momentum Program.”
“According to information procured exclusively, the three-pronged campaign will focus on calling for federal legalization. The program also includes the creation of a mentorship plan, through which the Playboy Foundation will support entrepreneurs from groups that are underrepresented in the industry.” Remember that CEO Kohn from earlier? He wrote this recently:
https://medium.com/naked-open-letters-from-playboy/congress-must-pass-the-more-act-c867c35239ae
Seems like he really wants weed to be legal? Hmm wonder why? The writing's on the wall my friends. Playboy wants into the cannabis industry, they are making steps towards this end, and we have favorable conditions for legislative progress.
Don’t think branding your own cannabis line is profitable or worthwhile? Tell me why these 41 celebrity millionaires and billionaires are dummies. I’ll wait.
https://www.celebstoner.com/news/celebstoner-news/2019/07/12/top-celebrity-cannabis-brands/
Confirmation: I hear you. “This all seems pretty speculative. It would be wildly profitable if they pull this shift off. But how do we really know?” Watch this whole video:
https://finance.yahoo.com/video/playboy-ceo-telling-story-female-154907068.html
Man - this interview just gets my juices flowing. And highlights one of my favorite reasons for this play. They have so many different business avenues from which a catalyst could appear. I think paying attention, holding shares, and options on these staggered announcements over the next year is the way I am going to go about it. "There's definitely been a shift to direct-to-consumer," he (Kohn) said. "About 50 percent of our revenue today is direct-to-consumer, and that will continue to grow going forward.” “Kohn touted Playboy's portfolio of both digital and consumer products, with casino-style gaming, in particular, serving a crucial role under the company's new business model. Playboy also has its sights on the emerging cannabis market, from CBD products to marijuana products geared toward sexual health and pleasure.” "If THC does become legal in the United States, we have developed certain strains to enhance your sex life that we will launch," Kohn said. https://cheddar.com/media/playboy-goes-public-health-gaming-lifestyle-focus Oh? The CEO actually said it? Ok then. “We have developed certain strains…” They’re already working with growers on strains and genetics? Ok. There are several legal cannabis markets for those products right now, international and stateside. I expect Playboy licensed hemp and THC pre-rolls by EOY. Something like this: https://www.etsy.com/listing/842996758/10-playboy-pre-roll-tubes-limited?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=pre+roll+playboy&ref=sr_gallery-1-2&organic_search_click=1 Maintaining cannabis operations can be costly and a regulatory headache. Playboy’s licensing strategy allows them to pick successful, established partners and sidestep traditional barriers to entry. You know what I like about these new markets? They’re expanding. Worldwide. And they are going to be a bigger deal than they already are with or without Playboy. Who thinks weed and gambling are going away? Too many people like that stuff. These are easy markets. And Playboy is early enough to carve out their spot in each. Fuck it, read this too: https://www.forbes.com/sites/jimosman/2020/10/20/playboy-could-be-the-king-of-spacs-here-are-three-picks/?sh=2e13dcaa3e05
Numbers: You want numbers? I got numbers. As per the company’s most recent SEC filing:
“For the year ended December 31, 2019, and the nine months ended September 30, 2020, Playboy’s historical consolidated revenue was $78.1 million and $101.3 million, respectively, historical consolidated net income (loss) was $(23.6) million and $(4.8) million, respectively, and Adjusted EBITDA was $13.1 million and $21.8 million, respectively.”
“In the nine months ended September 30, 2020, Playboy’s Licensing segment contributed $44.2 million in revenue and $31.1 million in net income.”
“In the ninth months ended September 30, 2020, Playboy’s Direct-to-Consumer segment contributed $40.2 million in revenue and net income of $0.1 million.”
“In the nine months ended September 30, 2020, Playboy’s Digital Subscriptions and Content segment contributed $15.4 million in revenue and net income of $7.4 million.”
They are profitable across all three of their current business segments.
“Playboy’s return to the public markets presents a transformed, streamlined and high-growth business. The Company has over $400 million in cash flows contracted through 2029, sexual wellness products available for sale online and in over 10,000 major retail stores in the US, and a growing variety of clothing and branded lifestyle and digital gaming products.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
Growth: Playboy has massive growth in China and massive growth potential in India. “In China, where Playboy has spent more than 25 years building its business, our licensees have an enormous footprint of nearly 2,500 brick and mortar stores and 1,000 ecommerce stores selling high quality, Playboy-branded men’s casual wear, shoes/footwear, sleepwear, swimwear, formal suits, leather & non-leather goods, sweaters, active wear, and accessories. We have achieved significant growth in China licensing revenues over the past several years in partnership with strong licensees and high-quality manufacturers, and we are planning for increased growth through updates to our men’s fashion lines and expansion into adjacent categories in men’s skincare and grooming, sexual wellness, and women’s fashion, a category where recent launches have been well received.” The men’s market in China is about the same size as the entire population of the United States and European Union combined. Playboy is a leading brand in this market. They are expanding into the women’s market too. Did you know CBD toothpaste is huge in China? China loves CBD products and has hemp fields that dwarf those in the US. If Playboy expands their CBD line China it will be huge. Did you know the gambling money in Macau absolutely puts Las Vegas to shame? Technically, it's illegal on the mainland, but in reality, there is a lot of gambling going on in China. https://www.forbes.com/sites/javierhasse/2020/10/19/magic-johnson-and-uncle-buds-cbd-brand-enter-china-via-tmall-partnership/?sh=271776ca411e “In India, Playboy today has a presence through select apparel licensees and hospitality establishments. Consumer research suggests significant growth opportunities in the territory with Playboy’s brand and categories of focus.” “Playboy Enterprises has announced the expansion of its global consumer products business into India as part of a partnership with Jay Jay Iconic Brands, a leading fashion and lifestyle Company in India.” “The Indian market today is dominated by consumers under the age of 35, who represent more than 65 percent of the country’s total population and are driving India’s significant online shopping growth. The Playboy brand’s core values of playfulness and exploration resonate strongly with the expressed desires of today’s younger millennial consumers. For us, Playboy was the perfect fit.” “The Playboy international portfolio has been flourishing for more than 25 years in several South Asian markets such as China and Japan. In particular, it has strategically targeted the millennial and gen-Z audiences across categories such as apparel, footwear, home textiles, eyewear and watches.” https://www.licenseglobal.com/industry-news/playboy-expands-global-footprint-india It looks like they gave COVID the heisman in terms of net damage sustained: “Although Playboy has not suffered any material adverse consequences to date from the COVID-19 pandemic, the business has been impacted both negatively and positively. The remote working and stay-at-home orders resulted in the closure of the London Playboy Club and retail stores of Playboy’s licensees, decreasing licensing revenues in the second quarter, as well as causing supply chain disruption and less efficient product development thereby slowing the launch of new products. However, these negative impacts were offset by an increase in Yandy’s direct-to-consumer sales, which have benefited in part from overall increases in online retail sales so far during the pandemic.” Looks like the positives are long term (Yandy acquisition) and the negatives are temporary (stay-at-home orders).
https://www.sec.gov/Archives/edgadata/1803914/000110465921006093/tm213766-1_defa14a.htm
This speaks to their ability to maintain a financially solvent company throughout the transition phase to the aforementioned areas. They’d say some fancy shit like “expanded business model to encompass four key revenue streams: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.” I hear “we’re just biding our time with these trinkets until those dollar dollar bill y’all markets are fully up and running.” But the truth is these existing revenue streams are profitable, scalable, and rapidly expanding Playboy’s e-commerce segment around the world.
"Even in the face of COVID this year, we've been able to grow EBITDA over 100 percent and revenue over 68 percent, and I expect that to accelerate going into 2021," he said. “Playboy is accelerating its growth in company-owned and branded consumer products in attractive and expanding markets in which it has a proven history of brand affinity and consumer spend.”
Also in the SEC filing, the Time Frame:
“As we detailed in the definitive proxy statement, the SPAC stockholder meeting to vote on the transaction has been set for February 9th, and, subject to stockholder approval and satisfaction of the other closing conditions, we expect to complete the merger and begin trading on NASDAQ under ticker PLBY shortly thereafter,” concluded Kohn.
The Players: Suhail “The Whale” Rizvi (HMFIC), Ben “The Bridge” Kohn (CEO), “lil” Suying Liu & “Big” Dong Liu (Young-gun China gang). I encourage you to look these folks up. The real OG here is Suhail Rizvi. He’s from India originally and Chairman of the Board for the new PLBY company. He was an early investor in Twitter, Square, Facebook and others. His firm, Rizvi Traverse, currently invests in Instacart, Pinterest, Snapchat, Playboy, and SpaceX. Maybe you’ve heard of them. “Rizvi, who owns a sprawling three-home compound in Greenwich, Connecticut, and a 1.65-acre estate in Palm Beach, Florida, near Bill Gates and Michael Bloomberg, moved to Iowa Falls when he was five. His father was a professor of psychology at Iowa. Along with his older brother Ashraf, a hedge fund manager, Rizvi graduated from Wharton business school.” “Suhail Rizvi: the 47-year-old 'unsocial' social media baron: When Twitter goes public in the coming weeks (2013), one of the biggest winners will be a 47-year-old financier who guards his secrecy so zealously that he employs a person to take down his Wikipedia entry and scrub his photos from the internet. In IPO, Twitter seeks to be 'anti-FB'” “Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon. But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi. Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday (November, 2013). Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.” https://www.nytimes.com/2013/11/08/technology/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday.html Y’all like that Arab money? How about a dude that can call up Saudi Princes and convince them to spend? Funniest shit about I read about him: “Rizvi was able to buy only $100 million in Facebook shortly before its IPO, thus limiting his returns, according to people with knowledge of the matter.” Poor guy :(
He should be fine with the 16 million PLBY shares he's going to have though :)
Shuhail also has experience in the entertainment industry. He’s invested in companies like SESAC, ICM, and Summit Entertainment. He’s got Hollywood connections to blast this stuff post-merger. And he’s at least partially responsible for that whole Twilight thing. I’m team Edward btw.
I really like what Suhail has done so far. He’s lurked in the shadows while Kohn is consolidating the company, trimming the fat, making Playboy profitable, and aiming the ship at modern growing markets.
https://www.reuters.com/article/us-twitter-ipo-rizvi-insight/insight-little-known-hollywood-investor-poised-to-score-with-twitter-ipo-idUSBRE9920VW20131003
Ben “The Bridge” Kohn is an interesting guy. He’s the connection between Rizvi Traverse and Playboy. He’s both CEO of Playboy and was previously Managing Partner at Rizvi Traverse. Ben seems to be the voice of the Playboy-Rizvi partnership, which makes sense with Suhail’s privacy concerns. Kohn said this:
“Today is a very big day for all of us at Playboy and for all our partners globally. I stepped into the CEO role at Playboy in 2017 because I saw the biggest opportunity of my career. Playboy is a brand and platform that could not be replicated today. It has massive global reach, with more than $3B of global consumer spend and products sold in over 180 countries. Our mission – to create a culture where all people can pursue pleasure – is rooted in our 67-year history and creates a clear focus for our business and role we play in people’s lives, providing them with the products, services and experiences that create a lifestyle of pleasure. We are taking this step into the public markets because the committed capital will enable us to accelerate our product development and go-to-market strategies and to more rapidly build our direct to consumer capabilities,” said Ben Kohn, CEO of Playboy.
“Playboy today is a highly profitable commerce business with a total addressable market projected in the trillions of dollars,” Mr. Kohn continued, “We are actively selling into the Sexual Wellness consumer category, projected to be approximately $400 billion in size by 2024, where our recently launched intimacy products have rolled out to more than 10,000 stores at major US retailers in the United States. Combined with our owned & operated ecommerce Sexual Wellness initiatives, the category will contribute more than 40% of our revenue this year. In our Apparel and Beauty categories, our collaborations with high-end fashion brands including Missguided and PacSun are projected to achieve over $50M in retail sales across the US and UK this year, our leading men’s apparel lines in China expanded to nearly 2500 brick and mortar stores and almost 1000 digital stores, and our new men’s and women’s fragrance line recently launched in Europe. In Gaming, our casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth. Our product strategy is informed by years of consumer data as we actively expand from a purely licensing model into owning and operating key high-growth product lines focused on driving profitability and consumer lifetime value. We are thrilled about the future of Playboy. Our foundation has been set to drive further growth and margin, and with the committed capital from this transaction and our more than $180M in NOLs, we will take advantage of the opportunity in front of us, building to our goal of $100M of adjusted EBITDA in 2025.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
Also, according to their Form 4s, “Big” Dong Liu and “lil” Suying Liu just loaded up with shares last week. These guys are brothers and seem like the Chinese market connection. They are only 32 & 35 years old. I don’t even know what that means, but it's provocative.
https://www.secform4.com/insider-trading/1832415.htm
https://finance.yahoo.com/news/mountain-crest-acquisition-corp-ii-002600994.html
Y’all like that China money?
“Mr. Liu has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.”
Dr. Suying Liu, Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp., commented, “Playboy is a unique and compelling investment opportunity, with one of the world’s largest and most recognized brands, its proven consumer affinity and spend, and its enormous future growth potential in its four product segments and new and existing geographic regions. I am thrilled to be partnering with Ben and his exceptional team to bring his vision to fruition.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
These guys are good. They have a proven track record of success across multiple industries. Connections and money run deep with all of these guys. I don’t think they’re in the game to lose.
I was going to write a couple more paragraphs about why you should have a look at this but really the best thing you can do is read this SEC filing from a couple days ago. It explains the situation in far better detail. Specifically, look to page 137 and read through their strategy. Also, look at their ownership percentages and compensation plans including the stock options and their prices. The financials look great, revenue is up 90% Q3, and it looks like a bright future.
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
I’m hesitant to attach this because his position seems short term, but I’m going to with a warning because he does hit on some good points (two are below his link) and he’s got a sizable position in this thing (500k+ on margin, I think). I don’t know this guy but he did look at the same publicly available info and make roughly the same prediction, albeit without the in depth gambling or cannabis mention. You can also search reddit for ‘MCAC’ and very few relevant results come up and none of them even come close to really looking at this thing.
https://docs.google.com/document/d/1gOvAd6lebs452hFlWWbxVjQ3VMsjGBkbJeXRwDwIJfM/edit?usp=sharing
“Also, before you people start making claims that Playboy is a “boomer” company, STOP RIGHT THERE. This is not a good argument. Simply put. The only thing that matters is Playboy’s name recognition, not their archaic business model which doesn’t even exist anymore as they have completely repurposed their business.”
“Imagine not buying $MCAC at a 400M valuation lol. Streetwear department is worth 1B alone imo.”
Considering the ridiculous Chinese growth as a lifestyle brand, he’s not wrong.
Current Cultural Significance and Meme Value: A year ago I wouldn’t have included this section but the events from the last several weeks (even going back to tsla) have proven that a company’s ability to meme and/or gain social network popularity can have an effect. Tik-tok, Snapchat, Twitch, Reddit, Youtube, Facebook, Twitter. They all have Playboy stuff on them. Kids in middle and highschool know what Playboy is but will likely never see or touch one of the magazines in person. They’ll have a Playboy hoodie though. Crazy huh? A lot like GME, PLBY would hugely benefit from meme-value stock interest to drive engagement towards their new business model while also building strategic coffers. This interest may not directly and/or significantly move the stock price but can generate significant interest from larger players who will.
Bull Case: The year is 2025. Playboy is now the world leader pleasure brand. They began by offering Playboy licensed gaming products, including gambling products, direct to consumers through existing names. By 2022, demand has skyrocketed and Playboy has designed and released their own gambling platforms. In 2025, they are also a leading cannabis brand in the United States and Canada with proprietary strains and products geared towards sexual wellness. Cannabis was legalized in the US in 2023 when President Biden got glaucoma but had success with cannabis treatment. He personally pushes for cannabis legalization as he steps out of office after his first term. Playboy has also grown their brand in China and India to multi-billion per year markets. The stock goes up from 11ish to 100ish and everyone makes big gains buying somewhere along the way.
Bear Case: The United States does a complete 180 on marijuana and gambling. President Biden overdoses on marijuana in the Lincoln bedroom when his FDs go tits up and he loses a ton of money in his sports book app after the Fighting Blue Hens narrowly lose the National Championship to Bama. Playboy is unable to expand their cannabis and gambling brands but still does well with their worldwide lifestyle brand. They gain and lose some interest in China and India but the markets are too large to ignore them completely. The stock goes up from 11ish to 13ish and everyone makes 15-20% gains.
TL;DR: Successful technology/e-commerce investment firm took over Playboy to turn it into a porn, online gambling/gaming, sports book, cannabis company, worldwide lifestyle brand that promotes sexual wellness, vetern access, women-ownership, minority-ownership, and “pleasure for all”. Does a successful online team reinventing an antiquated physical copy giant sound familiar? No options yet, shares only for now. $11.38 per share at time of writing. My guess? $20 by the end of February. $50 by EOY. This is not financial advice. I am not qualified to give financial advice. I’m just sayin’ I would personally use a Playboy sports book app while smoking a Playboy strain specific joint and it would be cool if they did that. Do your own research. You’d probably want to start here:
WARNING - POTENTIALLY NSFW - SEXY MODELS AHEAD - no actual nudity though
https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Craig-Hallum-Conference-Investor-Presentation-11_17_20-compressed.pdf
Or here:
https://www.mcacquisition.com/investor-relations/default.aspx
Jimmy Chill: “Get into any SPAC at $10 or $11 and you are going to make money.”
STL;DR: Buy MCAC. MCAC > PLBY couple weeks. Rocketship. Moon.
Position: 5000 shares. I will buy short, medium, and long-dated calls once available.

!! Content warning for blood and gore, sexual content !!
TL;DR: Viral TikTok leads people to think a specific plush is a bondage toy; the price skyrockets and plush collectors find their collections suddenly sexualized.

BACKGROUND CONTEXT:
All given prices are in USD.
Also preemptive disclaimer: I have no intention to kinkshame others in this post. I tried to remain as impartial as I could throughout.
Everyone reading this probably owns, or has owned at some point in their lives, at least one stuffed animal (or plush, as they’re more commonly called now). Some of us never stopped collecting, and continue to collect well into adulthood. There are all sorts of niches that plush collectors fall into—some only collect very realistic animal plush, others only collect custom one of a kind plush or art dolls made by artisans, and some others yet collect everything, etc. This post will focus specifically on those collecting “kawaii” plush—the Japanese word for cute. A majority of these plushies are made in Japan, designed by Japanese people and brands. Some companies in other countries also replicate the kawaii look, but these plush are not quite as popular. Various Facebook groups exist for plush collectors. The demographics of these groups tend to skew heavily female, and the age range for collectors of kawaii plush specifically skews from minor to young adult (30's), although there are also a lot of older parents.
Japanese plush are generally of high quality, and thus command higher prices. In general, expect to pay $25-40 per plush if you're buying stateside, and that's before taking additional shipping costs into account. Even small “mascot” plush (keychain size, about 2-3 inches tall) will go for about $15.
Now, let’s talk about these plush and their country of origin. In Japan, there’s two markets when it comes to kawaii plush. The first is plush specifically manufactured to be sold in stores—think branded Sanrio plush, like Hello Kitty. These plush are of premium quality and generally are easy to obtain for standard releases, even for overseas fans. The second market is plush specifically manufactured for UFO catchers, of which the closest equivalent would be “claw machines” in the west (although everything from the experience to the mechanics to the play style is incredibly inferior in western claw machines). These are known as prize plush, and are NOT sold in stores. The quality of these plush varies from good to excellent. Even the lowest quality prize plush tends to be leagues ahead of what’s found in American claw machines. Those who aren’t good at winning can buy them pre-owned or secondhand from shops and marketplaces catering to this sort of thing. All of this combined makes prize plush trickier for overseas fans to obtain.
Enter Toreba, a global online service that allows you to play Japanese UFO catchers in real time through your phone using the internet! They have hundreds of machines for you to browse through, all of them stocked with the same current prizes that Japanese players have access to. You buy credits using real money and then play to (hopefully) win. Any prizes that you win are shipped to you for free. Hop over to Toreba to take a peek at winning videos to see how it all works. (Off-topic warning: this is obviously a form of gambling, so be careful! Lots of people fall into the trap of spending hundreds or even thousands of dollars with very little to show for it, so I don’t recommend playing if you have an addictive personality.) Toreba essentially cut out the middle man, making it possible for overseas players to win prizes for themselves—or to pay others in their own country for them, instead of importing from Japan directly.
Now, getting closer to the topic at hand: there’s one designer whose plushies are consistently sought after. His name is Mori Chack, and you might even be vaguely familiar with his work if you stepped into a Hot Topic about 15 years ago: he’s responsible for creating the Gloomy Bear, an adorable but very violent pink bear that often ends up attacking his human owner named Pity. Nowadays, his plush are only available as prizes, and their quality of construction tends to be pretty high, with unusually shaped plastic eyes (an oval, instead of a circle), specially molded plastic claws, and embroidered blood spots. They come in dozens and dozens of different variations (someone made a 3 part picture guide on Google Docs here: [1] | [2] | [3]) in pretty limited runs, meaning they generally appreciate steadily in value over time as supply is limited and the same design is almost never replicated. They’re more akin to soft art pieces than plush, as most collectors will display them instead of playing with them.
Mori Chack is also the creator of another highly popular creature in the Gloomy universe: the All Purpose Bunny (also known by collectors as the Chax Rabbit), who also comes in dozens of variations, including collaboration variations featuring a certain famous Miku Hatsune. This cute li’l bun is the main star of today’s post, but first I need to briefly touch upon Mori Chack’s politics, as they are relevant to the subject. He’s an animal rights activist that explores his themes through his work. A common trend is cute animals getting revenge on humans for exploitation and abuse. The Gloomy Bear’s story is that Pity found the bear as a cub and took it back home to raise it. As the Gloomy Bear grew, it could no longer withhold its violent impulses and thus regularly attacks Pity as retaliation for its unnatural upbringing. This is why a lot of the Gloomy Bear plush are regularly splashed with bloodstains. As for the All Purpose Bunny, its story begins with being an experimental rabbit in a test lab. Genetic modification led to its strange properties and unnaturally long ears, and it eventually retaliated against humans for its years of abuse. All Purpose Bunny and Gloomy Bear often team up to attack and kill humans, using their unique skills and abilities to hunt them down in imaginative ways. The point is that they are no longer slaves to humanity (this is important).
Finally, a very small description of DDLG, since these kinksters play a minor role in this drama. DDLG (Daddy Dom/Little Girl) is a form of roleplaying ageplay in which two consenting adults take on the role of a dominant male and a submissive female. The daddy is responsible for taking on the role of the caregiver, and often disciplines his little. Littles tend to mentally and physically regress to an age most comfortable for them—the age range varies from infancy to young teen. The littles tend to act silly, immature, and bratty, and often break rules set by the daddy in order to be punished. The daddy is usually “in control”. Generally, there are agreed upon set times for the play to occur—this is known as “little space”—but some couples might prefer the dynamic to be more prominently reflected in their daily relationship.

THE DRAMA (At last!):
On July 31 2020, a Tiktok video featuring an All Purpose Bunny went unexpectedly viral, with well over a million views. It introduced many people to Mori Chack and his creations (debatable as to whether or not this is a good thing), but most significantly, the creator of the video declared at the end, with quite a lot of emphasis: “This is a bondage plushie.”
That proclamation changed the entire Mori Chack aftermarket literally overnight. There are at least half a dozen active plush collecting groups on Facebook, and every single one was bombarded by newcomers desperately trying to find one of these rabbits. Because the creator of the viral TikTok video did not specify the actual plush name, you had people looking for “that bondage bunny”, “TikTok rabbit”, and other similarly ignorant terms. I regret not taking screenshots of the flood at the time, but here’s a sample (once you've seen one, you've seen them all). At the height of the frenzy, you could scroll quickly for well over thirty seconds and see nothing but posts about the Chax Rabbit, even in groups that are usually very active.
In all fairness to the creator of the video, she clarifies that she meant it as a joke and has made a number of follow-up videos giving a more in-depth look into the lore. Unfortunately, none of these videos took off quite the same way, so many had their impressions formed solely from the viral video. Luckily, although quite a lot of people directed ire towards the video itself, it seems the person behind them wasn’t attacked (on Facebook at least—I don’t have a TikTok account so I can’t see any comments on the video itself).
These new collectors began snatching up rabbits left and right, sending the price of these rabbits skyrocketing. The rainbow one in the Tiktok video (known as the Fantasy Fur variant) was actually not a very popular color prior to the boom. They were going for about $25ish plus shipping. Once that stock rapidly depleted, the price skyrocketed to $80 or more per plush (with some like the Fantasy Furs reaching $100), which was ridiculous for a relatively new release—that price was usually reserved for the older rarer Mori Chack plush. When all of the Fantasy Fur rabbits were gone, people began looking for other variants. Longtime collectors, afraid of having their most sought-after plush being bought up, also began buying in droves to try and secure their plush before others got to it (compilation of images featuring people who purchased their most desired plush while they could, and the despair of those who were forced to miss out). As a result, the price of ALL rabbits began spiraling out of control. This had a spillover effect on Gloomy Bears as well.
As a personal example, I bought this pink argyle variant on June 20 2019 for only $15 including shipping, which was a little cheap for its going rate—others were going for about $25 including shipping. Today (September 13 2020), that same exact rabbit is on eBay for $65 + $15 shipping, or on Mercari for $85 + $5 shipping.
This goes beyond the normal appreciation I mentioned at the beginning of my post. Yes, Mori Chack plush did rise in value over time, but generally not to this degree. This was definitely unprecedented.

FALLOUT (or, The Drama, Part 2):
Whenever new fans begin to flood a community, there will inevitably always be gatekeeping and other minor clashes. Many old fans were frustrated by the sudden sexualization of their collections. Some collectors were parents who shared their plush with their children, which made the sexualization extra icky. There were a few posts involving newcomers making creepy comments on collection posts, like insinuating that the OP “must have a lot of fun with those rabbits”, or “I see those bondage bunnies ;)”. There was one instance where the rabbits actually belonged to the OP’s very young child, for added grossness points. Luckily, these sorts of exchanges tended to get deleted very quickly with the offending users banned, which helped ensure they never overran the groups.
Fans who ascribed to Mori Chack’s philosophy were frustrated by this perversion of the rabbits, because it explicitly paints the All Purpose Bunnies as being slaves of humanity yet again, now for sexual reasons. (Of course, many new fans pointed out that the “All Purpose” in the name naturally means they could be used for sexual reasons as well, which is a valid interpretation but also seems antithetical to Mori Chack's original intentions.) There were a few newcomers who very stubbornly refused to view the plush as anything other than sexual—here’s a screenshot of a conversation that is now deleted. This person was soon banned after continuing to fight with others, and they weren’t the only one being super weirdly stubborn about sexualizing these plush.
And then there was the influx of littles (remember them?) who were tickled by the idea of a functional set piece—not only are these plush cute and integral to the adorable little girl aesthetic, but they were also USABLE in sexual play! (Note: not really (compilation image)). Remember how I mentioned that some practitioners of DDLG tend to make it a lifestyle and not just a kink reserved for the bedroom? Some (not all, of course) of these new littles ended up being incredibly bratty and rude to the sellers in the groups. Many of these sellers are just other collectors as well, by the way, not wholesalers—as a result, the community is very close-knit and it’s easy to get yourself unknowingly blacklisted. If you’re cruel to one seller, they will almost certainly warn the others.
In case you’re wondering how I know these people are littles, it’s because I have seen them bring it up at some point or another.
[Small disclaimer: The Facebook app allows you to view all of your joined groups’ posts within one page, which unfortunately has made it incredibly difficult for me to try and figure out where I saw each and every post. As a result, I apologize for not having more screenshots. Also, some of the posts and comments I reference have been deleted by either the user or the admins/moderators of the groups, and I have no screenshots for those, either.]
Brief summary of some exchanges involving littles that I saw:

1. One little asked a seller a number of involved questions, including asking for more detailed pictures, height and weight information of the plush, examples of the seller’s packaging, etc—a little annoying, but completely valid questions to ask and well within your rights as a buyer. However, once she was seemingly satisfied, she dropped a, “Let me ask if my daddy will let me buy it!” She later returned with, “Daddy said no :(“, which ended up wasting everyone’s time and also raised concern (will touch on this later). This type of exchange began happening with increasing frequency, where (different) littles would essentially string a seller along before using their daddy’s disapproval as a reason for backing out of the sale.
2. Another little didn’t seem to enjoy plush at all, which already is a bit of a red flag for someone joining a plush collecting group. She made a post searching for All Purpose Bunnies for sale. A seller commented informing her that they no longer had the rabbits for sale, but they did have several Gloomy Bears for sale. The little asked, “So what does the Gloomy Bear do?” She was informed by the seller that the Gloomy Bear is simply another cute plush, and the little promptly responded, “I don’t want it, then.” It became clear that she was only interested in the All Purpose Bunny for its perceived sexual function, and likely wouldn’t enjoy it at all if it was “just” a plush.

Overview of changes in group dynamics I’ve noticed:

1. The plush collector groups that I am in tended to be pretty open-minded. No one bashed other people’s collections. Some of these groups are catch-all for all types of plush collectors and some are more focused, but everyone was supportive of others’ collections. It was a very positive and uplifting community. After the TikTok boom, people began being more judgmental. There were a number of posts about how people found the Chax rabbits ugly or overrated, and posts from newcomers judging longtime members for their large collections. A lot of judgment, primarily from newcomers, was introduced and still hasn’t been totally weeded out (although it's much better, now).
2. These groups are SFW and meant for all ages (so long as you’re old enough to join Facebook, anyway). There are a very large number of minors in these groups. This means no sexual content is allowed—but because of the TikTok video, a large number of littles have joined the groups, leading to concerns that they would attempt to transform the space to cater to them. There is definitely some not so subtle dogwhistling going on, and members openly calling their significant other “daddy” and referring to themselves as “littles” treads a very fine line that each group's admin rules differently on. Members tended to fall into two camps: some thought any and all mention of DDLG was inappropriate for the all-ages groups, while others thought that there was no harm in using the terminology openly. a. Those in the former camp believe that whatever happens in the bedroom should stay in the bedroom, so long as it involves consenting adults. Just like how wearing some of your BDSM gear out in public is distasteful because it pulls unconsenting people (strangers who might notice) into your fetish, some people believe that DDLG language being openly used where anyone including minors could read it was equally distasteful. Those against it believe it openly establishes the sexual proclivities (dom/sub) of DDLG members to strangers who may be uncomfortable unexpectedly learning about the sexual lives of others (and, more importantly, did not consent to gaining this knowledge). There's also the concern that such language can promote a troubling female subservience dynamic to uninformed minors, especially if these minors regularly see female collectors relying on their male partners for “permission” to buy a plush, as well as being coerced by their daddies to sell plush when they "have too many" (an entirely subjective opinion). b. The latter camp is comprised of defenders of those in the DDLG kink, and they often state that no one has the right to question their relationship and that doing so was kinkshaming. They also say that by questioning their usage of “daddy” or “little”, it was exposing minors to the kink when they may not have noticed the verbiage to begin with. They also argue that “daddy” could be used entirely innocently, and that it isn’t the admin’s or mod’s place to verify the intention behind their words. Because this is a tricky subject and no community wants to alienate a large portion of their members, as a result none of these groups explicitly banned DDLG practitioners from using their terminology. Any drama that crops up is usually stifled quickly, and people have more or less come to terms with the fact that just about anyone might be a little. ;)

THE AFTERMATH:
How are things today, about 6 weeks after the TikTok video? It depends. Prices for anything Mori Chack related are still inflated, especially as the supply continues to dwindle. What used to be the old normal is now seen as a good deal. The more abrasive newcomers have been banned, and the kinder more open-minded ones have stuck around (we love them). It’s doubtful that the production numbers for Gloomy Bears or All Purpose Bunnies will be raised any, and the newest set of Gloomy Bears seem to be selling at only slightly inflated prices, so interest is probably dying off. I don’t know what Mori Chack thinks of this whole thing, but people in the hobby are definitely aware of it in Japan, because prices on Japanese secondhand sites have risen as well and many sellers have begun selling on international eBay to take advantage of the hype. There are still littles in the groups that openly identify as such—if anything, there are more now than there were before—but drama specifically involving them basically doesn’t happen anymore.
But, hey! We got memes! In the end, isn't that what everyone on the internet wants??
If there are any loose threads I failed to tie up, feel free to let me know and I’ll answer your questions and edit the post for clarity. Thank you for reading, and I hope you enjoyed the drama! :)

Summary

• Polypropylene (“PP”) plastic has a $98 billion global market spread across a wide range of industries and products of which <1% of that market is derived from recycled material.
• PureCycle is a technology leader in recycling PP, it possesses a patented and proven purification process that produces nearly virgin-quality resin from plastics.
• Strong pushes from both consumers and regulatory bodies to move towards the use of recycled plastic make for a great opportunity in an untapped market.
• Despite strong market demand, PureCycle is the only player in the game with both the technology and cost competitiveness to supply recycled PP. As a result, it has already been approached with overwhelming interest from corporations.
• To play their parts in the drive for “Going Green” many corporations are targeting high rates of recycled content in PP products for the future. PureCycle’s global commercial partners to date include L’Oreal, Procter & Gamble, Total, and BMW, as well as several high-quality investors.
• There is a tremendous risk/reward opportunity at current prices, with revenue and EBITDA achieving hyper growth as plants come online with attractive economics, margins, and high ROIC. Assuming 30x EBITDA, TP YE’25 is $237 with shares trading at $19.00 today.

The Play
There is an increasingly big push from both environmentally-conscious consumers and governmental regulation to solve the building global plastic problem. As the Democrats assume power in Washington a push for environmental policy is expected, and single use plastic being banned in several states is just one example of the regulation to be expected for the future. Most investors are focused on green energy and consumer technology, while waste management and recyclables go overlooked. PureCycle is a revolutionary technology company focused on transforming waste PP into virgin-like resin. The same story that is driving enthusiasm for Enphase, Sunrun, and Tesla can be applied and seen for PureCycle Technologies. This is a massive global market for its taking, as no other companies or technologies can efficiently address PP recycling at scale. PureCycle holds the exclusive license to its patented solvent-based purification recycling technology, with the ability to commercialize it and bring recycled PP to market. With a disruptive technology, strong moat around the process, and tremendous demand given the consumer and regulatory environment, this creates an extremely exciting opportunity.
The SPAC Deal
PureCycle has struck a deal with ROTH CH Acquisition I that is expected to be finalized by the end of Q1 2021. PureCycle is to be acquired by ROTH CH Acquisition I with $76.5 million in trust. The deal is valuing the post-merger company at a $1.2 pro forma market capitalization and a $826 million Enterprise Value. The Enterprise Value is from the 118.3 million shares of ROCH capital sold at $10 plus the $310 million in debt that PureCycle raised by selling municipal bonds and $60 million in convertible notes minus the $667 million in cash that PureCycle will receive from the selling the shares. PureCycle plans on using the cash to finish Plant 1 and begin construction in Europe on Plant 2.
The Market
PP is used across a wide range of industries, including consumer packaged goods, electronics, automotive, building and construction, and agriculture. At the moment you see virgin PP in plastic containers, potato chip bags, razors, as well as food grade applications. The recycled PP at the moment can only be used for dark plastic applications such as trash cans, rugs, and plastic furniture due to the greying color and unpleasant odors that still remain.
The annual global demand of PP is roughly 173 billion pounds selling at approximately $0.57 a pound landing the total addressable market at ~$98 billion. The PP market has grown at an average of 4% a year for the past 5 years and is expected to continue to climb at similar rates in the coming years. As of 2020, due to polypropylene being extremely difficult to recycle, less than 1% (.8%) of all purchased PP is recycled. The demand potential for high quality recyclable PP, technology moat, and large time and cost barrier to entry positions PureCycle in a very strong place to start to meet the demand and create a recycle loop that the market is desiring.
An increasing number of companies are now setting sustainability mandates to act as a key differentiator. L’Oreal is targeting 50% recycled plastic by 2025, moving to 100% by 2030, while Procter & Gamble is targeting 50% recycled plastic by 2030. In a $98bn market, broad sustainability goals targeting 50% recycled plastic by 2025 represents a $49bn opportunity in the next five years. The demand side of this equation can be satisfied by PureCycle’s world-first recycling process, as it produces high quality resin without compromising appearance, purity or performance. PureCycle’s product quality has been tested and validated by Procter & Gamble, large contractual customers, and third-party engineering specialists. PureCycle is the only player able to capitalize on this tremendous demand opportunity and has already pre-sold 4x their existing capacity – all without a sales force. This technology can close the recycling loop for PP and be delivered in a cost-effective way.
Proprietary Technology with Tremendous Pricing Upside
PureCycle developed a physical separation process that utilizes a specialized solvent based purification process. All unit operations are well-known and commercially available at scales much larger than required by PureCycle and involves process operating conditions comparable to current polyolefin production conditions. This includes standard equipment like a Scheibel Extraction Column, a Decanter, Settler and Solid Extraction, candle filters, adsorption filters. This is important because it means the equipment is readily available and at the size that would be needed to scale the operations. The unique aspect here is what goes into the process, the filters/solvent used, temperature and pressure maintenance etc. This process also only consumes 1/7th the energy and is more cost efficient than producing virgin polypropylene. PureCycle can essentially recycle anything that has high PP content and create virgin quality resin.
The attractive pricing upside is easily found in the market, with rates of virgin PP selling at ~$0.57 / lb and recycled PP costing between $1.00 to $2.00 / lb. With regulation and consumer demand driving businesses to buy recycled PP and PureCycle having a much higher quality product produced at a lower cost to other recycled PP, it is safe to say there is a lot of pricing upside potential.
Unit Economi
Plant 1, which is being built now in Ironton, OH, will be PureCycle’s least efficient plant with modeled price / lb of $0.90 and EBITDA / lb of $0.45. Plant 2 will be a more efficient plant with improved unit economics of $0.55 / lb. The forecasted business is to include 5 plant clusters, that are much more efficient, with 825m pounds a year in capacity. The clusters give competitive advantage by leveraging the same infrastructure and reduced capex.
PureCycle’s model was structured around a municipal bond that they raised, negotiated at 14 cents a pound for feedstock. However, owners of plastic waste are generally charged cost to get rid of it, which gives PureCycle a great opportunity to leverage the system to capture pricing at a much cheaper price point.
The FCF and EBTIDA margin they are able to generate is extremely attractive at 58% and 56% even at the $1.00 price / lb. PureCycle’s growth strategy targets over $800 million in revenue with EBITDA margins in excess of 50% by 2024.
The current business plan has PureCycle building ~ 1 billion in capacity over the coming 3-4 years and at $1 a pound results in $1b of revenue. At a 50% EBTIDA margin, PureCycle will do 500m in EBTIDA. All of this results in extremely attractive top line math, unit economics into margin profile, and return on invested capital. Additionally, the funding on these facilities can get 80% debt for the project level capex.
Competition?
Other approaches to plastic recycling have existed in the market for decades, but they are limited in application, not cost competitive, and have failed to gain any meaningful traction as a result. Chemical recycling does not yield contaminant-free resin – limiting its potential food grade applications – and also has high energy costs. Mechanical recycling only works in limited use cases – not with any discolored feedstock, as the output becomes gray – and the product generally smells and looks unprofessional with melt flow index issues. PureCycle owns the only process that can take any feedstock and produce resin at a comparable virgin quality to virgin plastic -- usable for food-grade consumption. PureCycle also has a solid margin profile, as they are able to produce the product at 1/7th the energy cost of virgin.
The Bears Case
Some investors are worried about the fact that Procter and Gamble are the true owners of the patents that created the technology and PureCycle is only leasing them. The concern is that for some reason P&G licensed out the technology to other players. P&G decided to invest and develop the technology to solve a problem that they had with desiring to make their packaging from recyclable products. They decided that they did not have the commercial ability to bring it to market and made more sense to find a 3rd party to scale the business and PureCycle was chosen. The lead scientists and people from P&G are still working with PureCycle in more of a partnership than simply licensing the technology out. P&G is still very heavily invested and desires to see the success and scaling of PureCycle for its own benefits and goals and has agreed to be on the line to personally protect the patents for PureCycle as part of the deal. The current deal with PureCycle is an agreement to perpetuity, which should ease any hesitations by investors. No one else will be licensing this process/technology for the duration of the patents and Purecycle has developed a lot of their own patents as part of the commercialization efforts.
Another case against the buy is the fact that it is a SPAC deal between Roth and PureCycle and there is increased risk. This is in fact true, but the reality is the deal has already been announced and is simply waiting for the SEC to sign off. To date the SEC has not stopped an announced merger from closing for regulatory reasons and there is no reason to believe this deal should be any different. Roth is excited about the partnership as they view the business as a slam dunk opportunity.
Guaranteed Revenue and LOI’s
Major global commercial customers including L’Oreal, Procter & Gamble, Ravago and Total have already signed agreements committing to purchasing hundreds of millions of pounds a year. These contracts have already guaranteed 4 years of maximum output from PureCycle’s Plant 1. Many other major retailers have written LOI’s and are potential to fund and drive the growth of other facilities and plants. PureCycle has a deal with Nestle who has a goal and company commitment to seeing that 100% of its packaging is 100% recycled by 2025. I believe that for investors, PureCycle having deals with blue chip companies for long durations significantly de-risks any danger to revenue projections.
Forecasting Valuation
From a valuation perspective, by looking at the landscape, environmental services companies, waste managers of the world trade at ~10x – 18x EBITDA. This includes players like Advanced Disposal, Republic Services, Waste Management. The process technology players such as Albemarle, Amyris, Trex, Rogers Corporation get a larger premium, trading at a ~20x – 25x EBITDA. For the players with high growth, high margin potential and in ESG, the multiple starts to jump up quite significantly to ~30x+ EBITDA, companies such as Enphase, Solaredge, Array, Plug Power, Ballard Power etc.
Although there are no direct comps to PureCycle as the technology is one of a kind, I looked at Danimer Scientific (DNMR) who also recently completed a SPAC deal. Both companies have been formed from P&G developed patents to address the plastic problem that the environment faces. Danimer did purchase the patents outright but have owned them for close to 10 years and are still working to get the business going. Based on side-by-side comparisons of both companies self-projected business you can clearly see that PureCycle is trading at a significant discount.
Conclusion
PureCycle, with high value add and a unique offering, high margins, high expected growth, a proprietary process, large addressable market, and ESG is trading at an extremely attractive price point at 3.8x EBITDA. There is significant potential for rapid multiple expansion as their development plan is successfully executed.
This is a hyper growth story in revenue/EBITDA as plants come online with attractive economics. Financial projections show ~60% gross margin on the products and a ~30% ROIC for future plants at scale. The return profile here is extremely lucrative even with the pre-revenue valuation. Assuming 30x EBITDA, TP here is $237 by YE’25 with shares are trading at $19 today.