Is It Time To Watch Esports Penny Stocks Right Now?
When you think of penny stocks, what comes to mind? The first thought likely includes visions of grandeur and making boatloads of money. Next, you might think about the high risks involved, but what about factors outside the stock market?
I’m talking about the companies and the fundamentals that could help them grow. Something that investors (not traders) look for in penny stocks is their future potential. In short, we’re talking about small companies in most cases, and with that comes an opportunity to see companies (and industries) in their early stages.
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While not all penny stocks or novel industries go on to become showstoppers, there are ones that do. If you look at the early days of the crypto and blockchain industry, you can see how things have evolved. At first, blockchain penny stocks were thought of as fringe investments or highly speculative bets on a new area of finance.
Fast-forward a few years, and former penny stocks like Marathon Patent Group (NASDAQ: MARA) and MoneyGram (NASDAQ: MGI) have gone from pennies to record highs. In these examples, MARA stock tested highs of over $57 this year while MGI shares jumped to over $11.
Esports Penny Stocks To Watch
Another industry that has begun popping up on research lists is Esports. This industry isn’t playing any games either. According to market research firm Newzoo, revenues from competitive gaming are set to be just shy of US$1.1 billion by the end of this year*. Meanwhile, awareness of Esports continues to grow. There has been a flood of new interest in the industry since 2015. Just slightly more than 800,000 people had heard about it at that time. Newzoo found that nearly 2 billion people are well-aware of the industry itself, with over 660 million making up the active live streaming audience.
- Alpha Esports Tech Inc. (OTC: APETF) (CSE:ALPA)
- Super League Gaming (NASDAQ: SLGG)
- FansUnite Entertainment Inc. (OTCQB: FUNFF) (CSE: FANS)
- Limelight Networks Inc. (NASDAQ: LLNW)
Alpha Esports Tech Inc. (OTC: APETF) (CSE:ALPA)
The 2021 debut of Alpha Esports Tech Inc. marked the potential for a shift in gaming. The company has implemented a multi-pronged approach that includes esports, mobile gaming, and eCommerce. Its portfolio is built on the backbone of revolutionary products like its GamerzArena, setting the stage for a new type of competitive experience. According to the company, it boasts over 100,000 active users and a rapidly evolving ecosystem.
Alpha also boasts a leading list of names in sports, entertainment, and education partnering or working with the company. The New Jersey Devils, The Vancouver Whitecaps, Barstool Sports, ESPN Radio, and Syracuse University are some of the names that the company has highlighted. Furthermore, the launch of its GamerzArena+ product brings a subscription-based service to the table. The product costs $12.99 and allows members access to higher-paying tournaments along with the ability to access unique and special events.
Earlier this year, Alpha signed an Esports and marketing partnership with Centric Gaming, an Esports team, and roster with a combined over 150,000 followers on social media. Centric Gaming will use and promote the Company’s online gaming platform, GamerzArena, for several different activations and contests. Founded by NBA player Dion Waiters, the company will help build more awareness and potential subscription growth for Alpha’s GamerzArena+.
With growing interest in Esports, Alpha has begun merging the divide between education institutions and professional gaming. With the creation of Alpha League, Alpha Esports aims to establish itself as the go-to for gamer development. Its focus on talent building, scouting, and partnerships with leading sports & esports names could set it apart from its competition.
Super League Gaming (NASDAQ: SLGG)
Shares of SLGG stock have steadily climbed over the last month. In fact, between May 14th and June 14th, Super League’s share price has jumped from around $4 to just under $6 this week. One of the things that helped supercharge Super League was a bullish analyst rating from HC Wainwright last month. The firm started coverage on SLGG stock with a Buy rating and a $6 price target. As the penny stock approaches that target price, it looks like traders remain bullish on the company.
A few weeks ago, Super League announced the acquisition of Mobcrush. According to the company, this helped establish one of the largest “verifiable and addressable audiences of passionate gamers in the US.” Mobcrush operates a live streaming tech platform, which boasts a roster of gaming influencers and more than 4.5 billion accumulated fans * subscribers across social media sites.
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The company also expanded its partnership with Rumble Gaming. This will see some of Rumble’s biggest creators working with top global brands through Super League’s in-stream “Sponsored Live Break” viewing experience. This will also fold in the Mobcrush aspect of the company’s model. According to Super League, “Sponsored Live Breaks provide creators who use the Mobcrush live streaming software with a way to entertain their audience even when they have to step away from their device while broadcasting live.”
FansUnite Entertainment Inc. (OTCQB: FUNFF) (CSE: FANS)
This week FansUnite was added to the top tier of the OTC, the OTCQX. Previously it was listed on the OTCQB. This new market listing puts FansUnite on a platform designed for “established, investor-focused U.S. and international companies,” according to OTCMarkets Group.
Aside from this move, FansUnite has also achieved several fundamental milestones in the last few months. Namely, the company entered a brand partnership with Cash Live Inc. The goal of this deal is to launch FansUnite branded live games on the Cash Live mobile app. The company already has a minority interest in Cash Live, which offers a free-to-play gaming app designed for mobile devices. The tech start-up has a poker and social casino game show platform with daily live-streamed shows paying out real cash to winners.
The company also signed an agreement with Money Line Sports to allow Money Line as an approved white label partner and operator of the FAN’s licensed wagering platform. “The new digital betting portal will showcase FansUnite’s advanced gaming applications that will be equipped with Money Line’s top-tier streaming media solutions and robust sports content, resulting in a synergy that can capitalize on the betting interests of football fans and bettors,” said Scott Burton, CEO of FansUnite.
Limelight Networks Inc. (NASDAQ: LLNW)
On another side of the Esports “arena” is the ecosystem as a whole. Limelight Networks hasn’t made a game and doesn’t offer a place for people to play games. However, it does specialize in something that could further enhance the awareness and adoption of Esports.
The company offers an array of video streaming solutions. This includes options for live sports, events, and gaming. In addition, Limelight has a cloud-based workflow that allows multiple formats to deliver streaming content to any device.
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Not much has been announced since its last round of earnings. However, the company mentioned “formalizing broader plans to evolve” its offerings beyond video to “take advantage” of its network during low peak times. “We plan to hold a strategy update session in early summer. An announcement of the date and participation details will be shared approximately one month in advance of the event,” said CEO Bob Lyons earlier this year. So as summer begins, LLNW stock could be in focus.
Esports Growth Spurs Interest In Penny Stocks
According to Market Insight Reports, the global esports betting market size is expected to gain market growth in the forecast period of 2020 to 2025, with a CAGR of 13.1%. From a revenue perspective, it’s expected to reach $13.05 billion by 2025. Industry comparables also support the potential for rapid growth in esports companies. Furthermore, you’ve got broader industry ETFs suggesting strength right now as well. Since the start of 2020, including the pandemic drop, the VanEck Esports ETF (NYSE: ESPO) has climbed as much as 110% after hitting 2021 highs of $81.39. With this, interest in esports stocks has clearly increased.
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Endnotes:
- NewZoo Data: https://newzoo.com/insights/trend-reports/newzoos-global-esports-live-streaming-market-report-2021-free-version
- Market Insight Reports Esports Betting Market Size: https://www.marketwatch.com/press-release/latest-study-explores-the-esports-betting-market-share-trends-growth-and-forecast-2025-2021-03-01
