Post-Pandemic Momentum Could Mean Excitement For Entertainment Penny Stocks
Penny stocks are easily one of the most volatile types of stocks in the market. Thanks to their lower price, even slight moves in price can equate to large gains. Based on the definition of penny stocks, I’m talking about companies with share prices below $5. When it comes to industry momentum or even social sentiment, the moves are usually amplified for cheaper stocks.
One example we saw earlier in the year was with electric vehicle stocks. While the larger names like Tesla (NASDAQ: TSLA) and Nio (NYSE: NIO) were jumping 10-15%, small-cap EV penny stocks were surging 50% to 100%. Of course, the flip side to this is when the EV trend cooled. Nio and Tesla slipped but not nearly as much as their penny stock cohorts.
Today, we’re going to explore an emerging trend in the market thanks to budding interest in the reopening trade. Entertainment stocks are gaining ground. This isn’t just because of things like AMC stock skyrocketing. It’s also because people are starting to get back into some sense of normalcy. What’s more, some of the pandemic era trends for things like gaming and streaming remain a theme with staying power.
Esports Penny Stocks To Watch
Revenues from competitive gaming are set to be just shy of US$1.1 billion by the end of this year. That’s according to market researcher Newzoo*. Rapid global expansion, new revenue, and names like Shaquille O’Neal, Robert Kraft, Mark Cuban & Tony Robbins are already showing the latest market trend has begun to blossom.
Of course, you’ve got companies like Microsoft (NASDAQ: MSFT), EA Sports (NASDAQ: EA), and Activision Blizzard (NASDAQ: ATVI) taking the broader interest right now. But then you’ve got companies like Alpha Esports Tech. (CSE: ALPA) (OTC: APETF) and Super League Gaming (NASDAQ: SLGG) are gaining interest among those looking for lesser-known names just beginning to emerge in this industry.
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New Generation Of Esports
For example, Alpha’s GamerzArena is the lynchpin to its core business right now. According to the company, it boasts over 100,000 active users and a rapidly evolving ecosystem. It has already partnered & worked with big names in sports, entertainment, and education. These include The New Jersey Devils, The Vancouver Whitecaps, Barstool Sports, ESPN Radio, Notre Dame, Syracuse University, and others according to Alpha. Its GamerzArena+ product is a subscription-based service that only costs $12.99. Members gain access to higher-paying tournaments along with the ability to access unique and special events.
It’s also securing key partnerships to expand its footprint. This includes companies like Centric Gaming (founded by NBA player Dion Waiters) and its Pro Esports players, which will market Alpha’s GamerzArena+ service. Furthermore, the Senate passage of Bill C-128 in Canada now opens a whole new world of sports betting to companies in the Esports industry.
Super League is another company looking to capitalize on this jump in Esports interest. The company focuses on the entertainment side of the industry as opposed to the gaming portion. Super League offers Esports content and a community platform for players to use. Its technology gives customers the ability to offer competitive gaming tournaments. Via its current partnerships, the company has also worked on building out options for in-game player monetization, & video production.
This week, Super League announced that it integrated Mobcrush’s multicasting software solution with the interactive live streaming platform Trovo. This collaboration allows streamers and content creators to build upon their audience on a new destination for live gaming content across the globe. Super League recently acquired Mobcrush, and now, with Trovo, the company can offer Trovo users a way to easily broadcast to more destinations and grow audiences across multiple outlets simultaneously.
Another Industry Ripe For Consolidation?
Deal-making seems to be a hot trend in Esports right now. In line with this, Enthusiast Gaming (NASDAQ: EGLX) is another company working toward growth through M&A activity. Enthusiast focuses on offering media and content platforms for fans to connect & engage. Last week the company announced an acquisition of its own.
It closed a deal with Tabwire to gain access to its Tabstats product. The $11 million deal resulted in Enthusiast tapping into Tabwires technology and data platform, which offers gamers a way to create cross-platform registered user ID profiles for tracking gamer data in real-time.
Menashe Kestenbaum, Founder, and President of Enthusiast Gaming. He continued, “This acquisition represents the next big step in our mission to transform this industry even further and successfully deliver a game agnostic social network for gamers globally.”
Gaming Isn’t The Only Entertainment Niche Gaining Ground In 2021
While Esports has quickly taken a broader focus this year, it isn’t the only entertainment niche gaining ground. You’ve also got more traditional forms of media. For instance, LiveXLive Media (NASDAQ: LIVX) has gotten a nice boost of attention among retail traders. Its live streaming and on-demand entertainment offerings have gained acclaim thanks to LiveXLive’s integration of social media influencers.
Despite posting a wider loss in its last quarter, the company reported strong subscriber growth, increasing 27% to over 1 million compared to just 840k in the previous year’s quarter. CEO Robert Ellin commented this week that “Despite tremendous headwinds in calendar 2020 due to COVID 19, we managed record financial results across nearly all operating metrics. We were able to complete two extremely additive and accretive acquisitions – PodcastOne and our new merchandise company, CPS, which rounds out our flywheel of associated businesses. With the imminent return of live music events, we expect an increase in revenue from nearly every aspect of our flywheel – live ticket sales, live stream, pay-per-view, advertising, sponsorship, NFTs, and specialty merchandise.”
Digital Entertainment Penny Stocks To Watch
Other companies like Qumu Corporation (NASDAQ: QUMU) have also gained interest recently. The company provides tools for creating live and on-demand videos. Its platform allows organizations to boost engagement, offering more access to video, and is geared toward workplace developments.
The company recently teamed up with Birmingham County Football Association. This is expected to bring on-demand video content to some 70,000 players and nearly 25,000 volunteers. The tie-up will aim to provide information, education, and resources to those involved within this ecosystem.
Qumu’s President and CEO, TJ Kennedy, said, “As BCFA develops new video resources for everyone, from kids just starting on their football journeys to tenured professionals, Qumu will work alongside them and their 4,780 teams. We believe that video can drive engagement and performance.”
Are Entertainment Penny Stocks On Your List Right Now?
These are just a handful of names among the broader entertainment industry. They may not be the latest Reddit penny stocks to watch. But with reopening on the horizon, it could be a good idea to keep this niche in mind. Also, it’s important to consider some of the supporting cast, so to speak. These are companies providing the picks and shovels or infrastructure needed to support industry growth.
So, names like Baosheng Media (NASDAQ: BAOS), which offers online marketing and advertising, or Telefonica (NYSE: TEF), offering data solutions, could be ones to watch in this like. Needless to say, there are plenty of ways to play the entertainment trend. It will come down to how these companies plan to execute on their models and achieve sustainable profitability that will determine the ultimate growth prospects.
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*NewZoo Data: https://newzoo.com/insights/trend-reports/newzoos-global-esports-live-streaming-market-report-2021-free-version
