Bidstack Share Boost From Azerion Deal Starts To Fade – What Next?

Bidstack Group PLC (LON: BIDS) shares jumped as much as 150% when the tie up with the games publisher Azerion was first announced. As we said about Bidstack the question was how long was that boost going to last? Clearly, the deal was important, material to the company, but how important and material?

In the absence of any further news, in the sense of something important enough to announce to the market, the Bidstack share price has been bouncing around and coming off its peaks. A reasonable assumption might be that this is what we can expect until there is some new information to change views once again.

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The theoretical importance of this is that any asset price – and this clearly applies to a share price like Bidstack’s – is the net present value of all future income from that asset. This is that possible future revenue, times the probability of it arriving, discounted back to current day valuations. Yes, theory, but important theory, because it explains why a share price like that of Bidstack can move so sharply then do nothing much.

For if we get the news that something has happened then that changes those estimates of future revenue. This then changes that net present value. That should be obvious enough. Bidstack’s deal with Azerion at least indicates higher revenue in the future. There’s that slip ‘twixt cup and lip to worry about, will it really happen the way we think and so on. But the market will at least attempt to evaluate all of this and reach a new valuation.

At which point Bidstack is reasonably valued given the information the market has about it. Maybe some thought it should be a little higher than it is today, some a little lower, but a general averaging out of views happens and we reach a stable enough price range.

So, new news and we get that bounce. That peaks, we see a bit of a fallback, reach a new possibly stable trading range. But of course what we as traders want to know is what happens next?

Theory tells us that if all known news is in that share price then to move that Bidstack share price then we need to have new news. Which is where predictions – as opposed to opinions – about the future of the Bidstack share price become difficult. For what is that new news going to be?

Two possibilities present themselves, one being that having onboarded Azerion the Bidstack platform becomes more valuable to other games publishers as well. Ad markets do enjoy network effects so once use starts to rise it can simply continue to rise because of them. The other is that we might have to wait until we see actual operating results from the Azerion onboarding.
A reasonable, but not certain, evaluation is that the simple fact of the Azerion deal is now in the Bidstack share price. What happens next depends upon, well, upon what happens next really.