Richard Todd Schwartz, the Chief Executive Officer of Rush Street Interactive, Inc. (NYSE:RSI), has recently sold a significant portion of his holdings in the company. According to an SEC filing, Schwartz sold a total of 193,905 shares of Class A Common Stock over two transactions on November 15 and 18, 2024. The shares were sold at prices ranging from $11.0205 to $11.201 per share, resulting in a total value of approximately $2.15 million.
Following these transactions, Schwartz retains 1,613,578 shares of Class A Common Stock in direct ownership. This sale was conducted under a pre-established 10b5-1 trading plan, which allows insiders to set up a predetermined plan to sell stocks at a later date, thus helping avoid any concerns of insider trading.
In addition to the stock sales, Schwartz also made several gifts of Class V Voting Stock. These transactions involved transferring 1,168,014 shares each to his spouse and an irrevocable trust for estate planning purposes. These shares were transferred at no cost, and Schwartz retains indirect ownership of some of these shares through family connections.
These moves come as part of Schwartz's broader financial and estate planning strategy, reflecting both personal financial management and regulatory compliance.
In other recent news, Rush Street Interactive (RSI) reported a record-breaking third quarter in 2024. RSI saw revenues surge to $232 million, marking a 37% increase from the previous year, and an adjusted EBITDA of $23 million, a fivefold rise year-over-year. This is the 15th consecutive period of revenue increase for the company since going public.
In response to these strong results, RSI has raised its 2024 revenue guidance by 3% and EBITDA guidance by a significant 24%. The company now forecasts EBITDA to be 110% above initial expectations for the year. Additionally, RSI announced a share buyback program of up to $50 million and reported a strong cash position with $216 million in unrestricted cash and no debt.
The company also noted a significant growth in Monthly Active Users (MAUs) in both North America (28%) and Latin America (122%). RSI is exploring expansion into new markets, particularly Latin America and Canada, and is open to potential acquisitions. Despite these positive developments, RSI faces challenges with low hold rates in North American sports betting and potential tax increases.
InvestingPro Insights
To provide additional context to Richard Todd Schwartz's recent stock transactions, let's examine some key financial metrics and insights for Rush Street Interactive, Inc. (NYSE:RSI).
According to InvestingPro data, RSI's market capitalization stands at $2.65 billion, reflecting its position in the online gaming industry. The company has shown strong revenue growth, with a 30.31% increase over the last twelve months as of Q3 2024, reaching $863.77 million. This growth trend is further emphasized by a robust quarterly revenue growth of 36.63% in Q3 2024.
InvestingPro Tips highlight that RSI holds more cash than debt on its balance sheet, indicating a solid financial position. This aligns with the company's ability to cover short-term obligations, as liquid assets exceed short-term liabilities. These factors may have influenced Schwartz's decision-making regarding his stock holdings and estate planning.
The stock's performance has been noteworthy, with a 141.11% price total return over the past year and a substantial 150.78% year-to-date return as of the latest data. This impressive growth could explain the timing of Schwartz's stock sales, potentially capitalizing on the stock's strong performance.
It's worth noting that while RSI has shown strong top-line growth, the company was not profitable over the last twelve months. However, an InvestingPro Tip suggests that analysts anticipate the company will be profitable this year, which could be a positive sign for investors.
For readers interested in a more comprehensive analysis, InvestingPro offers 16 additional tips for RSI, providing a deeper understanding of the company's financial health and market position.
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