AGS shares drop up to 13.4% following announcement of public offering sale

The supplier will be selling Apollo Global’s 22% stake in the company and receiving no proceeds itself.

Casino supplier AGS has made a secondary public offering of 8.2 million shares of the company’s common stock. Each share is currently valued at $0.01 and is (for now) owned by Apollo Global Management.

AGS shares dropped as much as 13.4%, in after-hours trading, since it announced the sale of Apollo Global’s 22% stake in the company. AGS will not receive any profits from the proceeds of this offering.

The shares of common stock that are to be sold in this public offering represent all of the shares held by a ‘selling stockholder’ in the company (Apollo Global). Selling stockholders are existing shareholders who can sell shares through private placement offerings, which are exempt from certain financial requirements.

Selling stockholders use ‘underwriters’ to offload their shares through private placement offerings. Underwriters are financial institutions pledging to buy all unsold shares in a public offering – in the AGS offering it is J.P Morgan and B.Riley Securities acting in this capacity.

Underwriters sell common stock using numerous methods: directly, through agents and through brokers working on the New York Stock Exchange. The dealers purchasing common stock can obtain them for different prices – fixed, market prices at the time of sale or negotiated prices.

AGS recently saw a planned merger with Inspired Entertainment in September canceled – that setback led to a 20% drop in the company’s stock prices.

Recently, PlayAGS reported revenue of $78.2m for the third quarter of 2022, an encouraging 16% increase for the provider from the prior-year period.

Robert Collins

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