Analysts at Numis Securities pulled out all the stock market proverbs in their lockers, as well as some new ones, to persuade clients to ditch Betfair.
“Trees don’t grow to the sky” is not an uncommon investing mantra and in this case suggests the growth must stop somewhere along the line for the online betting group. More unusual was the line: “A horse with a stick on its nose is not a unicorn... and neither is Betfair.”
Numis’s number crunchers are convinced the company has too much competition to merit its £2.5bn market value, highlighting the near-70 per cent share surge this year.
“It is not, in our view, on track for the market dominance which merits “unicorn” status and which appears to us to be implied by the share price,” chief analyst Ivor Jones wrote.
The downgrade to sell, with a 2,100p target price, triggered a 136p fall in Betfair to 2,509p.
The FTSE 100 closed 54.64 points down at 6,804.6, ending a miserable week for the benchmark index, which has been bruised by the Greece debt debacle. US jobs data filled investors with some confidence about the recovery of the world’s largest economy but not enough to make up for early losses.
Vodafone’s 6.05p fall to 242.05p accounted for much of the trading on the top flight, with £267bn worth of the mobile giant’s shares traded on Friday after it unveiled talks with Liberty Global over asset-swaps but not a full-blown merger as was hoped.
Merlin Entertainments lost another 6.5p to 440.4p in a week to forget for the attractions group. It follows a crash at its Alton Towers theme park which left several people seriously injured and caused it to close the park.
Shares in the Horse Hill oil explorers eased after gushing early on as independent assessors said there are 271.4 million barrels of oil in place per square mile under the surface near Gatwick Airport. The news was accompanied by the caveat that this may not be recoverable. UK Oil & Gas, up 0.125p to 2.775p, Solo Oil, up 0.005p to 0.55p, and Alba Mineral Resources, down 0.025p at 0.725p, are among the tiddlers with stakes in the project.Reuse content