Posted on: April 11, 2024, 08:12h.
Last updated on: April 11, 2024, 08:12h.
Lottery.com (NASDAQ: LTRY), the formerly controversial online lottery provider, said Thursday it regained listing compliance with Nasdaq.
That was accomplished after the gaming company maintained a minimum market value of publicly held shares (“MVPHS”) of at least $5 million over the past 10 days. Texas-based Lottery.com had a market capitalization of $9.97 million as of the close of US markets today, according to Seeking Alpha data. The gaming company believes regaining listing compliance with the exchange could be a driver of future growth.
Our status as a Nasdaq-listed entity is essential to our business framework. It fosters a democratic approach to decision-making, empowering a broad spectrum of stakeholders to actively shape the trajectory of innovative ventures and opportunities at both Lottery.com and Sports.com,” said CEO Matthew McGahan in a statement.
Shares of Lottery.com are down 19.19% year-to-date and 76.61% over the past 12 months. The operator came public in October 2021 following a merger with special purpose acquisition company (SPAC) Trident Acquisitions Corp.
Long Road Back for Lottery.com
Regaining Nasdaq compliance is part of what’s been a long road back for Lottery.com — one filled with controversy, including a spate of executive departures in 2022 and concerns about the ability of the firm to remain in business. That year, former Chief Compliance Officer Dennis Ruggeri became the subject of an FBI investigation.
The upheaval and regulatory controversies prompted a period in which the stock wasn’t able to trade on the Nasdaq, though it was reinstated in June 2023. Last December, Lottery.com announced a batch of new leadership hires and that it landed $18 million in financing from Prosperity Investment Management.
In February, the United States District Court for the Southern District of New York dismissed a class action brought against Lottery.com by a disgruntled investor.
“We are here to serve the interests of all our shareholders and won’t be swayed by a small minority represented by discredited individuals with vested self-interests,” added McGahan.
Lottery.com Still Has Work to Do
Regaining listing compliance with Nasdaq is important, but Lottery.com still has plenty of work to do to foster confidence among market participants and broaden its investor base.
Notably, the gaming company’s small market capitalization indicates it’s an unlikely candidate for near-term inclusion in widely followed equity indexes. When stocks are added to those benchmarks, active and passive funds that follow those gauges must buy the newly added stocks, meaning that buying power is likely off limits for Lottery.com for the foreseeable future.
Additionally, the stock’s closing price of $2.19 today is a headwind unto itself because many professional fund managers are barred from buying sub-$5 or $10 stocks.
