What Happened to the Tabcorp Holdings Share Price?
Shares in gaming and wagering company Tabcorp Holdings Ltd [ASX:TAH] soared by more than 6% today, outpacing a buoyant Australian market. Tabcorp is now trading near the top of the range in which it has been bound for most of the past eight months.
Why Did This Happen to TAH Shares?
Tabcorp is suing the State of Victoria for compensation it says is due after its gaming license expired. The company is seeking close to $700 million as a license fee refund.
This morning Tabcorp announced that the Supreme Court of Victoria would deliver its judgement on the case at 4:30pm today.
Investors clearly believe the finding will be favourable for Tabcorp. The market has bid up TAH shares to add more than $150 million to the company’s market capitalisation today.
What Now For Tabcorp Holdings Ltd?
It’s good news for shareholders that the market is pricing in a favourable court ruling for Tabcorp. But investors should be aware that a less-than-favourable ruling this afternoon will likely see the shares fall hard on the opening bell tomorrow.
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This stock’s trading may be volatile in the near term. But regardless of today’s court outcome, Tabcorp will continue to be a formidable force in the Australian gambling industry.
The shares still offer a reasonable dividend yield that’s well north of bank savings rates, and the FIFA World Cup in Brazil can only have provided Tabcorp with a boost in activity. All of that makes Tabcorp shares a reasonable proposition at these levels.
Tim Dohrmann+
Small-Cap Analyst, Money Morning
