Poker icon Phil Hellmuth stated on Tuesday that he sold his equity interest in Rush Street Interactive (NYSE: RSI) following the announcement that the gaming company will discontinue its affiliate program in the states where it operates — a move that received backlash in certain gaming communities.
In a post on X (formerly Twitter) that Hellmuth noted was “NOT investment advice,” he did not reference Rush Street Interactive’s choice to stop its affiliate platform. Instead, he voiced worry regarding macroeconomic factors and overall market valuations.
"Today I sold all of my shares (165,000 shares) of $rsi stock at $10 a share. I still believe in @RSInteractive, but I’m afraid of macro economics conditions. The SandP 500 seems overvalued to me: boats rise and fall w the level of the water, stocks rise and fall w the market,” opined Hellmuth.
In 2020, Hellmuth put $300,000 into the special purpose acquisition company (SPAC) dMY Technology Group Inc., which merged with RSI that year, facilitating the gaming company's entry into the public market. According to that statement and his claim of selling 165,000 shares for $10 each, totaling $1.65 million, Hellmuth’s RSI investment increased over five times.
Potentially Unfortunate Timing in Hellmuth's Sale of RSI Shares
It’s undeniable that Hellmuth’s gains from Rush Street Interactive shares are impressive, and selling a stock that has yielded 161.36% in a year could be seen as a wise decision. However, the 17-time World Series of Poker (WSOP) bracelet winner might have achieved even greater profits with RSI.
The company has been widely speculated to be a target for takeover, and if such an agreement is officially revealed, it could enhance the previously mentioned rally. Aside from consolidation speculation, RSI benefits from natural advantages, such as rising revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA).
Late Wednesday, RSI announced its second-quarter results while adjusting its 2024 sales projections and its EBITDA guidance to a range of $64 million to $72 million. That caused the stock to rise nearly 10% in after-hours trading, as of now. If the stock finishes at $11 on Thursday, it would mean $165,000 in lost profits for Hellmuth, although that's just small change for someone whose total poker winnings exceed $30 million.
“RSI expects revenue for the full year ending December 31, 2024 to be between $860 and $900 million, increasing the midpoint by $45 million compared to the prior guidance. At the midpoint of the range, revenue of $880 million represents 27% year-over-year growth when compared to $691 million of revenue for 2023,” according to a statement issued by the Chicago-based gaming company.
Within Rush Street Affiliate Conclusion
Although Hellmuth did not explicitly state that his choice to sell RSI stock was influenced by the operator's decision to stop its affiliate program, the timing of the transaction prompted connected speculation.
On Wednesday, RSI contacted affiliates in Arizona, Colorado, Illinois, Indiana, Louisiana, Maryland, Ohio, and Virginia to inform them that the affiliate program will conclude on August 31. No explanation was provided for that choice, and the gaming company informed affiliates they had to remove all RSI advertisements and tracking links from their websites by that date.
In the affiliate model, websites create content pertaining to iGaming, poker, and sports wagering, providing links to different gaming companies' mobile applications and websites, thus earning commissions for referred players.