LONDON — Sports Direct billionaire Mike Ashley is sitting on paper gains of roughly £4 million from his investment in Game Digital after a surprise trading update from the games retailer sent shares soaring.
Game Digital said in a trading update on Wednesday that group sales are up 6.8% for the second half of the year, boosted by the launch of the new Nintendo Switch console.
The company added that, after a business review, it has decided to “focus management and capital resources on the acceleration of the development of the esports and live gaming initiatives.”
The retailer has been struggling for the last year or so but the update helped shares rocket as much as 30% on Wednesday morning.
Here’s how the stock is looking at 9.25 a.m. BST (4.25 a.m. ET):
The rise means a big paper profit for Sports Direct and its billionaire owner Mike Ashley. Sports Direct bought a 25% stake in Game Digital last month for £10 million when shares were trading around 24.25p. Back-of-the-envelope calculations based on today’s share price suggest that stake is now worth around £14 million.
Mike Ashley has a fondness for taking stakes in other listed companies through Sports Direct. Ashley is yet to comment on the Game Digital stake.