3 Entertainment Penny Stocks to Watch Now
There are plenty of new & emerging trends in penny stocks. This is typically the case with any industry with room for innovation & growth. Since these many companies are still in their infancy, speculation can play a big role in the market &, with that, volatility. But what are penny stocks, really?
At the fundamental form, these are just shares of companies that trade for under $5. But certain niches give rise to more than “the average day at the office.” We’re talking about high-risk stocks that can break out hundreds of percentage points within hours. One niche, in particular, has gained some interest recently.
Entertainment penny stocks, for example, can be a great way to get exposure to an interesting and burgeoning market. The last few months have seen entertainment stocks like Dolphin Entertainment Inc. (NASDAQ: DLPN) or Gamestop Inc. (NYSE: GME) have seen significant breakouts.
While these two examples have other factors that made them rise in addition to being entertainment stocks, they do provide interesting insight into the market right now. In the past, the demand for entertainment has also been extremely resilient to both political and economic turmoil. Because of this, many investors turn to these companies for both short and long-term holdings.
Entertainment Penny Stocks to Watch
For context, the term entertainment stock means any company that derives the majority of its revenue from entertainment-related products. This could be digital content, in-person venues, and many others. While some of these companies engage in other industries, entertainment remains the core of their business.
It’s important to consider two things when looking for an entertainment penny stock to buy. For one, what is its audience size, and how many people touch its platform? Second, what is its long-term strategy for keeping up with the competition? These are important factors that all prospective investors should consider. Here are three entertainment penny stocks to watch right now.
- Color Star Technology Co. Ltd. (NASDAQ: CSCW)
- RealNetworks Inc. (NASDAQ: RNWK)
- Limelight Networks Inc. (NASDAQ: LLNW)
Color Star Technology Co. Ltd.
Color Star Technology is an entertainment penny stock that we’ve been covering for quite some time. For some context, Color Star works in both entertainment and education,, among other industries. During the pandemic, CSCW has grown in popularity due to its education services. The recent trend of virtual learning stocks has helped to provide sympathy momentum to Color Star and several similar companies.
With its popularity, Color Star quickly moved into the entertainment sector and had new ties to the NFT market. A few weeks ago, it signed an agreement with Doman (HK) Ltd. to use the latter’s blockchain technology in support of its interactive entertainment software known as Color world APP.
On March 30th, it provided an update on its NFT work once again, stating that it is developing a non-fungible token for its wholly-owned subsidiary, Color China Entertainment Co.
The CEO of Color Star, Mr. Luke Lu, stated that “the company has always strived to build our entertainment business on the application of new digital technology, and now with the NFT development, we should be able to achieve more breakthroughs in science and technology with respect to our products, services, and partnerships. With a strong foundation in celebrity entertainment content and creative capability, coupled with the launch of the Color World APP…the company can better enhance and perfect the application scenarios for NFT.”
Given the excitement surrounding NFT penny stocks right now, CSCW could be one to watch.
RealNetworks is similar to Color Star in that it produces digital media. However, it differs in the application of its novel technological advancements. This includes utilizing artificial intelligence and machine learning to enhance its portfolio of products. Its flagship offering, known as the SAFR, is the world’s foremost computer vision platform for live videos. In addition, it offers Kontxt, which is an NLP or natural language processing platform that can transform and analyze text.
A few months ago, RNWK announced its fourth quarter and full-year 2020 financial results. RealNetworks posted a 3% gain in revenue year-over-year to $68.1 million to the benefit of investors. It also managed to improve its net loss by over $10.1 million, albeit still bringing in a loss of $5.1 million from operations.
During the quarter, it managed to sell Napster to MelodyVR for a total of $26.6 million in addition to a buyer’s assumption of $44.1 million in payment obligations. This put its unrestricted cash at the end of the year at almost $24 million. Rob Glaser, CEO of RealNetworks, stated that “revenue from two of our key growth initiatives — free-to-play mobile Games and SAFR – grew over 110% from 2019. We are also pleased to have completed the sale of Napster to MelodyVR. We believe the sale of Napster simplifies Real and will help us deepen our focus on our growth initiatives and create long-term shareholder value.”
It’s always good to see a company with a balance sheet that outperforms the year prior. This is a strong sign of growth and forward-thinking management. With demand for entertainment continuing to rise, companies like RealNetworks could be moving in the right direction and worth a closer look.
Limelight Networks Inc.
Ahead of its Q1 2021 financial report on April 29th, let’s take a close look at Limelight Networks. Limelight offers content delivery services to help optimize and deliver digital content to everything from live-streamed sporting events to global movie launches and more. It offers products such as private networks and its team of experts to help provide edge services to various industries.
In a report commissioned by the company titled “State of Online Gaming 2021”, consumers reportedly played more than 9 hours of online games per week. This is a new high and shows that demand could continue to rise in the coming months. Additionally, the report showed that more than 74% of consumers are interested in purchasing a new game console due to updated technology.
Edwin Koh, Director of Southeast Asia at Limelight, stated that “Asia Pacific is home to some of the world’s most ardent gamers, and they are now looking to video games to provide an interactive, high performance, disruption-free experience that allows them to connect with others and play longer.”
Looking ahead, the company will release its latest financial results for the first quarter of 2021 on April 29th. This should give a glimpse into the performance over the last few months and build expectations for the rest of the year. If LLNW is on your list of penny stocks, you may want to keep this date in mind.