The Israeli billionaire who founded gambling software group Playtech has sold a further 11.5% stake in the company to raise £340 million. The sale caught many investors out and the shares fell back from a record high when Teddy Sagi sold his shares. While he is no longer the largest shareholder in the company he still has a 6.3% stake which is not insignificant. So, why is the Israeli billionaire selling down his stake Playtech and where will the money be going?
Strong share price
First of all the Playtech share price has been exceptionally strong of late and who could really blame Mr Sagi for selling some shares? Analysts are still extremely positive on the company and while the lumpy sale caught many investors off guard no real harm has been done. If he had sold all of his stake then that may be different but he still has a multi-million dollar investment in the company. So, is real estate the real love of Teddy Sagi?
Switching to real estate
In reality this is not the first share sale by Mr Sagi with the proceeds used to further his real estate investments. The billionaire helped to build up the group from nothing to one that provides gambling software to some of the major gambling companies and bookmakers in the world. It is well-known that he has a strong love of real estate with a particular emphasis on “flexible shared office space for start-ups and entrepreneurs”.
Through his company LabTech Mr Sagi already owns a large area of land in Holborn, Central London and is currently in talks to buy the company which owns the majority of Camden Market. Add to this a controlling stake in a Dutch property company and everything starts to fall into place.
Shared office space
While we often hear of entrepreneurs who began their multi-million dollar companies in their bedroom or garage, these are not the perfect environments in which to remain focused on the job in hand. If you ask any entrepreneur whether they would prefer to have their own office away from the home environment or work from home, we know the majority would say. Teddy Sagi has plans to create a hub of shared office space right across Europe focusing on capital cities. This comes at a time when entrepreneurs are feeling the pinch even though for those with a great idea and a determination to push it through, there is every possibility they can still succeed. However, there is nothing wrong with a little help at the start!
Balancing your portfolio
If this ongoing reduction in Teddy Sagi’s stake in PlayTech shows us anything, it is the long-term benefits of real estate. There is no point in having all of your eggs in one basket because all share prices can be volatile while real estate prices tend not to be as volatile. The idea of shared office space for entrepreneurs and small businesses is not a new one but the ability to pre-book office space in capital cities across Europe is an interesting one.
How useful would low-cost office space available in each capital city of Europe be for would-be entrepreneurs looking to crack the European market?