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MONTREAL — Shares in Amaya Inc. sank 18 per cent Friday after the company confirmed that Quebec’s securities regulator has launched an investigation into trading activity surrounding the acquisition of PokerStars, which transformed Amaya into the world’s largest online poker company.

The shares dropped nearly 29 per cent to $25 in early morning trading on the Toronto Stock Exchange, but recovered somewhat by early afternoon, down $6.31 at $28.75.

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Previously Amaya’s shares had been on a tear, more than quadrupling in value to an all-time high of $39.25 in the wake of the US$4.9-billion PokerStars deal announced in June.

The transaction was announced June 12, but industry observers said the Montreal-based company had given signals earlier that it was preparing for a large transaction.

Industrial Alliance analyst Neil Linsdell wrote three weeks before the announcement that the company showed its cards when it moved to sell its existing poker platform.