Shares of Sportradar Group AG (NASDAQ:SRAD) are in focus Monday morning, having plummeted approximately 20% over the past four trading sessions.
This sharp decline follows a short report released last Wednesday by Muddy Waters Research, which accuses the sports data giant of “putting the BET into aiding and abetting” global illegal gambling.
In a public statement, a spokesperson for Sportradar unequivocally challenged the report’s assertions, citing “several factual inaccuracies” and suggesting a “fundamental misunderstanding” of the industry.
“Sportradar works exclusively with licensed operators, follows strict global compliance, and due diligence standards, and we stand by our independently audited financial statements, risk disclosures, and information provided to investors and regulators,” the company said.
- Sportradar Group stock is among today’s top performers. Why are SRAD shares rallying?
Undercover Allegations
The report alleges that Sportradar, often described by its CEO as the “FBI of gambling,” actually derives 20% to 40% of its total revenue from illegal operators.
Muddy Waters alleged its undercover investigators, posing as a startup targeting banned markets like China and Vietnam, were offered tailored products and introductions to notorious criminal syndicates by Sportradar executives.
The firm documented nearly 50 clients reportedly operating illegally, including sanctioned Russian sportsbooks and entities linked to Southeast Asian human trafficking.
Muddy Waters also targeted Sportradar’s financial reporting, alleging a “maladjusted” EBITDA metric. The report argues the company excludes nearly €80 million ($93.88 million) in accrued interest on license fees, effectively overstating its fiscal year 2024 adjusted EBITDA by 48%.
Finally, the firm alleged that Sportradar’s business model is structurally dependent on high-margin illegal revenue to offset “loss leader” data rights deals with major professional leagues.
SRAD Shares Rebound Monday Morning
SRAD Stock Price Activity: Sportradar shares were up 1.88% at $13.54 at the time of publication on Monday, according to Benzinga Pro data.
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