Betfair Share Price: A Case Study

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Of course, Betfair share price evolution is similar to Paddy Power’s. Indeed, for the same period (25th / 26th august) Betfair share price grew by 16.40% from 26.03£ to 30.30£, a value of 4.27€. Following the peak, the share price of Betfair fluctuates normally with a little tendency for decrease. I assume this fluctuation result of the division 52% 48% in disadvantage of Betfair. Also, raise of share price from the 25th of august to 8 of September is equal to 19.59% or 5.1 GBP (see Figure 2). c. Reasons of this growth In order to explain the grow of Paddy Power and Betfair share price, the perception of the deal and markets participants is the key of success (Picardo 2015). The merger must be perceive as durable and as economic driver for …show more content…

The market capitalization of Paddy Power is: 44,048,942 x 98.95€ = €4,358,642,810.9. In another hand, Betfair had issued 92,896,239 Betfair shares, the market price of a share is 42.64€. The market capitalization of Betfair is: €3,961,095,630.96. In conclusion, the market capitalization of Paddy Power Betfair is: €8,319,738,441.86 c. Classification of Paddy Power Betfair Aiming to minimize risks for the investors, companies are classified into categorizes according to the value of their market capitalization (Investopedia 2004). By consequence Paddy Power Betfair is classified as a “mid-cap”, considered to be more volatile than Large and Mega cap companies. Indeed, company in “mid-cap” are mostly defined as leading company or strong challenger in the industry. Of course, this denomination change over time and must be adapted to limit investor risks over time. VI. Impact on shareholders In the case of Paddy Power Betfair, the merger has a really positive impact on shareholders. As a result of the merger, the revenues of the company are expected to be over 1.1 billion pounds (Maidment & Halpin 2015). Moreover, Paddy Power shareholders would own 52% of the group, the remaining shares would be owned by Betfair shareholders (Massoudi & Moore

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