Feb. 18 at 5:54 AM
$SGHC $DKNG $ETOR $STOCKTWITS
MERGER IDEA ANALYZED BY GROK
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“If pulled off, it creates a powerhouse; if not, it risks value destruction. Given the leaders involved, I'd bet on success.”
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Your proposal to merge or form a deep strategic partnership among Super Group (SGHC), Stocktwits, eToro, and DraftKings (DKNG) to build a global financial super app—integrating social investing discussions, multi-asset trading, sports betting, and potentially prediction markets—has real merit. It could create a formidable competitor to Robinhood (HOOD), which has built its empire on seamless, user-friendly access to stocks, options, crypto, and basic banking features. Below, I'll break down why this is largely a good idea, weighing the potential value unlocked against current company multiples, synergies, market disruptions (especially from prediction markets), global positioning, and the leverage of the "super team" you described. My analysis draws on current market data (as of mid-February 2026), industry trends, and strategic fit.
### Current Valuations and Multiples: A Foundation for Accretive Value
To assess if this transaction could be accretive (i.e., increase earnings per share or overall value for shareholders), we need to compare the companies' current standings. Based on recent data:
- **SGHC (Super Group)**: Market cap ~
$4.5B–
$4.8B, enterprise value (EV) ~
$4.1B–
$4.5B. Trailing P/E ratio ~20–22 (profitable with EPS ~
$0.42), forward P/E ~11–12. EV/Revenue multiple ~1.9x (based on ~
$2.2B TTM revenue). This is a mature, cash-flow-positive operator focused on global online betting (e.g., Betway brand), but it's undervalued relative to peers due to slower U.S. growth and regulatory headwinds like UK tax hikes (expected to cut 2026 EBITDA by ~6%).
- **DKNG (DraftKings)**: Market cap ~
$10.5B–
$11.1B, EV ~
$11B–
$11.5B. Still unprofitable (trailing P/E negative at ~-554), but forward P/E ~14–20 on expected 2026 revenue of
$6.5B–
$6.9B (short of analyst hopes for
$7.2B, causing recent stock dips). EV/Revenue ~1.6x–1.7x. High growth potential in U.S. sports betting, but shares have halved in value over the past year amid market saturation and competition.
- **eToro (NASDAQ: ETOR)**: Publicly traded since its Nasdaq IPO in May 2025
Trailing P/E ~11–13, forward P/E ~10. Revenue proxy (net contribution) ~
$868M for FY2025, with Q4 at
$227M; profitable with net income ~
$216M annually. As a social trading platform with ~35M users across 140+ countries, it faces pressure from low-fee competitors but benefits from diversified assets (stocks, crypto) and recent U.S. expansion.
- **Stocktwits**: Private, valued at ~
$800M in its 2021 raise (likely ~
$1B–
$1.5B now with user growth to 10M+). Revenue from ads, premium subs, and partnerships (e.g., its recent integration with eToro for direct trading). No public multiples, but as a social network for investors, it's low-valuation with high engagement potential.
- **HOOD (Robinhood) for comparison**: Market cap ~
$25B–
$28B (not directly in your query but relevant as the rival). Forward P/E ~25–30, EV/Revenue ~5x–6x on ~
$2.5B revenue. It's trading at a premium due to its "super app" status—integrating trading, crypto, retirement accounts, and even basic banking—driving user stickiness and cross-sell.
**Accretive Potential**: A combined entity could unlock
$5B–
$10B+ in value through synergies, pushing the total market cap to
$20B–
$25B (rivaling HOOD). Why?
- **Cost Savings and Revenue Upside**: Shared tech stacks (e.g., eToro's trading engine + Stocktwits' social feeds + DKNG/SGHC's betting infrastructure) could cut redundant R&D/marketing costs by 20–30%. Cross-selling could boost ARPU (average revenue per user): e.g., Stocktwits users trading via eToro (already happening) + betting on sports events. Global expansion—SGHC's strong Europe/Africa presence + eToro's international footprint—could add
$1B–
$2B in incremental revenue by entering underserved markets like Asia/Latam.
- **Multiple Expansion**: The group trades at blended multiples below HOOD's (e.g., average forward P/E ~15–18 vs. HOOD's 25+), with eToro's low 3.5x EV/EBITDA highlighting undervaluation amid its post-IPO recovery. A super app narrative could re-rate the entity to 20–25x forward earnings, adding billions in market value. It's accretive if executed as a stock-for-stock deal or partnership (avoiding heavy debt), especially since SGHC and eToro bring profitability to offset DKNG's losses.
- **Risks to Multiples**: If not managed well, regulatory scrutiny (e.g., betting/trading overlaps) or integration failures could compress multiples, making it dilutive short-term. But overall, the math favors value creation—similar to how HOOD's acquisitions (e.g., crypto wallets) boosted its valuation.
### Synergies and Competitive Edge Against Robinhood
This isn't just a mashup; it's a logical evolution toward a "everything finance" app:
- **Product Integration**: Stocktwits provides the social layer (real-time discussions, sentiment analysis). eToro adds multi-asset trading (stocks, crypto, ETFs). DKNG/SGHC bring sports betting and iGaming. Result: A single app where users discuss trades, bet on games, and execute everything seamlessly—mirroring HOOD but with deeper social/betting features. Existing Stocktwits-eToro partnership shows this works; expand it to include betting.
- **User Acquisition and Retention**: 10M+ Stocktwits users + eToro's 35M + DKNG's 20M+ active bettors = massive scale. Cross-promotions (e.g., "Bet on the game discussed in this thread") could double engagement, reducing churn vs. HOOD's more siloed experience.
- **Monetization**: Beyond fees, add premium tools (e.g., AI predictions via Stocktwits data) or ad revenue from partners like Tilman Fertitta (DKNG shareholder, Golden Nugget owner) and Martin Moshal (SGHC's Entree Capital, tech investor).
This could create a "formidable global competitor" as you said, especially since HOOD is U.S.-centric (80%+ revenue domestic), while your group would be truly international.
### Impact of Prediction Markets: Disruption as Opportunity
Prediction markets (e.g., Kalshi, Polymarket, Railbird) are exploding—
$44B+ traded in 2025, up from
$9B in 2024, with sports bets driving 85–90% of volume. They're disrupting traditional sports betting:
- **Threats**: No geo-restrictions (available in all 50 U.S. states vs. betting's 39), lower taxes/fees, instant cashouts, and deep liquidity (e.g.,
$1B+ on Super Bowl). Kalshi alone hit ~
$1.3B annualized sports revenue in early 2026—~20% of DKNG's projected size. This erodes market share; DKNG and FanDuel (Flutter) stocks fell 50%+ last year partly due to this.
- **Opportunities**: Sportsbooks are fighting back—DKNG acquired Railbird (up to
$250M) to launch "DraftKings Predict," entering non-sports predictions (e.g., elections, Oscars) nationwide. FanDuel did similar with CME Group. Your super app could integrate this: Use SGHC/DKNG's betting tech for regulated sports wagers, while adding prediction markets for broader appeal (e.g., "Will Bitcoin hit
$100K?"). This hedges disruption—turning a threat into a moat. Protocols like WINR or Ballies (on-chain betting) show how social platforms can embed predictions virally.
Net: Prediction markets add urgency to your idea—consolidation helps incumbents like DKNG/SGHC scale against upstarts, potentially capturing 10–20% more market share.
### Global Scale and Positioning
- **Strengths**: SGHC's Betway is strong in Europe, Africa, and Australia (non-U.S. revenue ~80%). eToro operates in 140+ countries. DKNG dominates U.S. (top market share in 25+ states) but is expanding internationally. Stocktwits is global but U.S.-heavy. Combined: Instant entry to ~200 countries, bypassing HOOD's U.S. focus.
- **Gaps**: U.S. betting regs limit DKNG/SGHC; eToro faces crypto scrutiny. But partnerships (e.g., via Fertitta's networks or Moshal's VC ties) could accelerate licenses.
- **Market Fit**: Global online gambling/trading is ~
$500B (growing 10%+ annually). A super app targets millennials/Gen Z (70% of users), blending entertainment (betting/social) with investing—perfect for emerging markets like India/Brazil.
### The "Super Team": World-Class Leverage
You're spot on—Eric Grubman (SGHC chair, ex-Goldman/NFL exec, dubbed "financial impresario" for NFL deals) brings dealmaking prowess and sports ties. Howard Lindzon (Stocktwits CEO, investor) excels at community-building. Yoni Assia (eToro CEO) is a fintech visionary with global reach. Jason Robins (DKNG CEO) has scaled betting aggressively. Shared connections (e.g., Fertitta in DKNG, Moshal in SGHC, potential NFL overlaps) make "getting them in a room" feasible. This team could navigate regs, attract talent, and execute—unlocking intangible value like innovation (e.g., AI-driven bets) and partnerships.
### Overall: Good Idea, But Not Without Risks
This is a **good idea**—potentially transformative, with strong accretive potential (value unlock:
$5B+ via synergies/multiple expansion) and a path to rival HOOD globally. Prediction markets add tailwinds if integrated smartly. However, execution is key: Regulatory hurdles (e.g., betting licenses, antitrust), cultural clashes (private vs. public firms), and integration costs could derail it. Start with partnerships (like Stocktwits-eToro) before full merger. If pulled off, it creates a powerhouse; if not, it risks value destruction. Given the leaders involved, I'd bet on success.
