The past year has been challenging for gaming equities, particularly those that went public through reverse mergers with special purpose acquisition companies (SPACs). However, Codere Online Luxembourg (NASDAQ: CDRO) has emerged as a notable exception.

The Spanish sportsbook operator, which debuted on December 1, 2021, following its merger with DD3 Acquisition Corp. II, has seen its stock price soar by 170% year-to-date. This performance is the best among US-listed gaming stocks resulting from SPAC deals, surpassing notable names like DraftKings (NASDAQ: DKNG), Rush Street Interactive (NYSE: RSI), and Super Group (NYSE: SGHC).

While many blank-check deals have struggled, Codere Online has reaped the benefits of this method of going public.

Founded in 2014, Codere Online is part of Codere Group, the only Spanish-listed company in the gaming industry. It holds the distinction of being the first Latin American internet gaming entity to be publicly traded in the US.

Codere Online: A Hidden Gem?

With a market value of $368.50 million as of late Monday trading hours, and without operations in the US, Codere Online may be undervalued compared to other sports betting equities.

Unlike US-based iGaming and sports betting companies that expand rapidly across states, Codere Online has taken a more measured approach in Latin America, focusing on Mexico and not hastily entering other markets.

“We put other markets like Argentina, Colombia, or Panama, where we currently don’t have a winning formula, on standby while we continued to focus on our core markets,” stated Jiminez.

Rapid Path to Profitability

A common issue with de-SPACed companies, both in gaming and other sectors, is the extended time they take to become profitable. Codere Online broke this trend by reaching profitability within just two years, benefiting from avoiding the high costs associated with the US market.

Jiminez emphasized the company’s focus on rapid growth while maintaining free cash flow and EBITDA.

“As we start to generate cash over the coming months, we will remain attentive to any opportunities that can help us maximize value for our shareholders,” he concluded.

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