A Smooth Transition Is Great News For Landcadia Holdings II

For months, there was heated debate about the future of blank-check company Landcadia Holdings II (NASDAQ:LCA) and an impending shareholder vote. The proper transition from LCA stock to GNOG stock depended on the approval of Landcadia’s merger with Golden Nugget Online Gaming (NASDAQ:GNOG).

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There are few greater opportunities in the stock market than when traders get nervous. The share prices of perfectly good stocks come down and smart money swoops in.

Of course, it’s understandable if traders have questions and concerns when a stockholder vote is coming up. To be honest, you never really know what the outcome is going to be.

Today, I’ll do my best to clear up any confusion about LCA and GNOG stock. At the same time, I’ll present a bullish argument in favor of a value-added company with real growth potential amid the nation’s economic recovery.

LCA and GNOG Stock at a Glance

If you try to look for a chart of LCA stock now, you might not easily find one. That’s because LCA stock has transitioned into GNOG stock.

This doesn’t mean that LCA stock holders are out of luck. It only means you’ll be watching GNOG stock now. Still, it’s important to track the progress of LCA stock in recent weeks.

LCA stock was just a shell company for a while, and investors didn’t yet know which company Landcadia would merge with. During that time, LCA shares just went sideways.

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After being stuck near $10 for weeks on end, LCA stock went on a wild roller-coaster ride after the merger with Golden Nugget Online Gaming was announced. The stock shot up to $16, then back down to $11 and change.

After that, LCA share prices rose to $18 before pulling back to slightly above $11 again. Finally, in November and December, LCA stock blasted up past $20. So the bulls finally had their breakout.

But even with the bulls’ triumph, there was drama in late December. LCA stock was disappearing and GNOG stock was set to debut on the Nasdaq Exchange. But would the change-over go as planned?

A Day of Consequence

To provide some background, Landcadia Holdings II was a special purpose acquisition company (SPAC) led by a billionaire named Tilman Fertitta. As a shell company, Landcadia’s only real purpose was to take Golden Nugget Online Gaming public.

In a a virtual meeting scheduled for December 18, Landcadia’s shareholders were finally set to vote on whether the company would merge with Golden Nugget Online Gaming. This came six months after the SPAC first announced its plans to merge with Golden Nugget.

It was the final hurdle for Landcadia to clear: by that time, the New Jersey Casino Control Commission had already signed off on a gaming license for Golden Nugget.

When the day came, the financial message boards were lit up with talk about the shareholder vote. Most folks expected the stockholders to approve the merger. But you know Murphy’s Law : whenever something can go wrong, it will.

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Hold Your Breath, Then Relax

December 18, the day of reckoning, it was announced that the vote would be delayed until December 29. Bears surely enjoyed this moment, but their party wouldn’t last too long.

More than 99% of shareholders voted in favor of the merger, so the bulls really had nothing to worry about. And as expected, the business combination with Golden Nugget Online Gaming was finalized on December 29.

Thus, as of December 30, GNOG stock was alive and well with 2.3 million shares traded that day. The share price landed at $22.55, not too far from where LCA stock left off.

Meanwhile, the gaming industry in which Golden Nugget operates is also alive and well, or at least moving in the right direction. Voters recently choose to decriminalize some forms of sports betting in November in three states: Maryland, Louisiana and South Dakota.

The Takeaway

It’s totally normal for markets to get jittery about a perfectly good stock. Both LCA stock and GNOG stock were meant to succeed despite the worries about the merger not going through as planned.

Today, GNOG shares are tradable and there’s plenty of room for upside. With the merger in the rear-view mirror, it’s time to refocus and enjoy the future returns with GNOG stock.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. 

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