The Canadian eSports stocks on our list stand to benefit most from the emerging eSports industry
SmallCapPower | November 14, 2019: Video games have been a popular pastime since the 1970s, but advancements in technology and social media have helped spur the popularity of eSports in recent years. In 2015, ~800,000 people worldwide were aware of eSports, with that number skyrocketing to more than a billion people by the end of 2016. The audience of eSports streams and broadcasts, which showcase tournaments, leagues, and other events, has also been on the rise, with the global eSports audience estimated to grow to 453.8M viewers by the end of 2019, according to the Newzoo Global eSports Market Report. Today we have identified four Canadian eSports stocks that we believe have the greatest upside potential.
*Share price data as at November 12, 2019, data obtained from S&P Capital IQ
eSports Stocks: Next Big Opportunity for Investors
New Wave Esports Corp. (CSE:NWES) – $0.10
eSports
New Wave Esports is an esports and competitive-gaming focused investment company based in Toronto, Ontario and Los Angeles, California and is our highest conviction idea. The Company offers capital and advisory services (acting as an operator in portfolio companies) to the esports industry, primarily to teams, organizations, events, tournament organizers, platforms, networks, technologies, and tools. New Wave’s early investment in Tiidal Gaming has a chance to pay off big. Over the past few weeks, NWES stock has been trading between $0.10 and $0.12, which implies a market cap of ~$8.5M (77.7M shares outstanding). NWES has 59.8M warrants with an average strike of $0.21 and 14.9M convertible securities. NWES’ first day of trading was on October 28, 2019.
- Market Cap: $7.7M
- 5-Day Return: +0.0%
- 30-Day Return: N/A
- 30-Day Average Trading Volume: 971,000
Enthusiast Gaming Holdings Inc. (TSXV:EGLX) – $2.16
eSports
Enthusiast Gaming Holdings owns and operates an online network of websites devoted to video gaming as well as Canada’s largest video-gaming expo. EGLX’s content platform consists of over 80 gaming websites with more than 75M visitors every month, which has driven more than 12B ad requests per month. Behind Twitch Interactive, EGN Entertainment, and GameSpot, Enthusiast’s content is one of most viewed North American gaming sites. Enthusiast also owns and operates Canada’s largest gaming expo, Enthusiast Gaming Live Expo, with approximately 55,000 people attending in 2018. On November 13, 2019, Haywood Securities initiated coverage of EGLX with a price target of $3.75 (Canadian), implying 74% upside, saying the risk factor is very high and calling it “the largest Canadian gaming roll up.”
- Market Cap: $154.9M
- 5-Day Return: -1.4%
- 30-Day Return: +2.9%
- 30-Day Average Trading Volume: 297,240
Torque Esports Corp. (TSXV:GAME) – $1.80
eSports
Torque eSports (formerly Millennial eSports) is a vertically-integrated mobile gaming publisher looking to fuse eSports racing and professional motorsport through a global competition model. GAME utilizes its gaming franchises and intellectual property to engage millions of new players and aims to become the market leader in eSports Racing. Torque Esports also operates mobile applications related to eSports. Its services include video production, promotions, streaming, and broadcasting. On August 22, Torque Esports announced that it would be taking a 51% stake in the motorsport simulator manufacturer, Allinsports. In a following announcement on November 5, 2019, GAME reported that it is expected to launch a new eSports driver database, with the aim of providing the esports racing industry with up-to-the-minute data on gamer performances and rankings.
- Market Cap: $20.0M
- 5-Day Return: -3.0%
- 30-Day Return: -36.0%
- 30-Day Average Trading Volume: 9,810
Axion Ventures Inc. (TSXV:AXV) – $0.38
eSports
Axion Ventures is an investment company with a majority ownership in Axion Games, an online video game development and publishing company headquartered in Shanghai, China. The Company also has majority ownership in True Axion Interactive Ltd., its video game development company in Bangkok, Thailand. Axion Ventures (AXV) also has several other portfolio companies in related innovative technologies. On July 22, the Company announced that it has closed a non-brokered private placement of convertible debentures in the principle amount of US$1.375M; the debentures convert at C$0.90 per common share and have an interest rate of 10%. On October 17, 2019, Axion announced the initiation of the prototype for its mobile version of the popular PC game, Rising Fire.
- Market Cap: $80.7M
- 5-Day Return: +7.0%
- 30-Day Return: -7.3%
- 30-Day Average Trading Volume: 22,820
Ubika Research/SmallCapPower has received compensation from New Wave Esports Corp. to provide analyst research coverage. For full disclosure please visit here >>
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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