Last week, The Market Herald launched an article titled 'Are Emerge Gaming’s (ASX:EM1) 6M pre-registrations real?'.
There was much anticipation around the latest release of the news, traders and holders a-liked believed the next release would be an announcement in regards to an increase in pre-registrations on the platform - which it was, and they had subsequently doubled. On the 28th of October 2020, Emerge Gaming [EM1] released news that their pre-registrations had doubled since their last announcement on the 19th of October 2020, from 3 Million to an impressive 6 Million. It was assumed on the release of this news Emerge Gaming would reach the $0.20 mark, it peaked at $0.155 before decreasing at pace - This is where everything went a little haywire, and I believe The Market Herald's article had a little something to do with it. The Share Trading world is full of fear-mongering sceptics, who in reality know very little (if anything) about what it takes to build and launch a product, brand or service. And, who also want to drag particular companies down (or push them up) for their benefit. Let me just note, that in the week prior to the latest pre-registration announcement, the highest buy in points sat at $0.10 to $0.105 (Keep this in mind as we proceed). And yes, this is accurate, I am a savvy screen-shotter and have receipts.
The Market Heralds article on Emerge Gaming was released a short time after the ASX announcement was made, and in reality the article was nothing more than unfounded scepticism and lacked any substance or proof to back up their claims (and possibly may have contributed to the ASX query that resulted in a trading halt?). The article trended on ASX groups and forums like Hot Copper and I personally believe it was a significant contributing factor to the panic sell that occurred on the 28th of October 2020. The fantastic news and figures Emerge Gaming released was quickly overshadowed by the doubt The Market Herald had helped conjured up and EM1 dropped to the sweet buy-in point that 'powers at be' were waiting for, yep you guessed it $0.10. As Warren Buffet once said "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." The article in question..Essentially the article is a form of Clickbait [if you don't know what Clickbait is, you can read more about it here and here], essentially Clickbaits are used to tempt visitors to click on a particular link either to monetise the landing page or to spread the false news for sensationalisation.Let's break down the sensationalism in the article
First off, it asks 'Are the 6 million pre-registrations real?'. Emerge Gaming have clarified they have obtained 5.5 Million registrations for the MIGGSTER platform. Okay, so they may have rounded it up slightly, or just assumed that they were sure to hit the 6 million mark shortly. Not a big deal, they have verified they do in fact have a substantial number of pre-registrations.The main focus points of the article is that Emerge Gaming utilised the services of Tecnología de Impacto Múltiple SL, and Crowd1 to market the MIGGSTER platform. Now, this is where everyone is freaking out. However lead generation is a standardised method used by marketers to generate leads prior to a product/brand launch (yes, including incentives). Another concern was 'How many pre-registrations' will equate to paying customers. As a general marketing rule (yes by the way, I am qualified in marketing) those leads I mentioned are then filtered through a strategic funnel that is designed to maximise the conversion rate (conversion rate = converting leads into paying customers). Also, the agreement with TIM guarantees a minimum of 100,000 paying (converted) subscribers within 6 months • 100,000 subscribers equates to monthly revenue of USD$850k (~AUD$1.2M) at a monthly subscription of USD$8.50 (~AUD$12.00) each.So let's talk about Emerge Gaming as a company and why I personally believe it's here to stay and grow.The company itself is managed by a highly experienced and capable board. Gregory Stevens is a co-founder of Emerge Gaming - You can find out all the information about Gregory on the Emerge Gaming website and via his public LinkedIn. Prior, he was a director of a world class eSports development agency, which has developed for top international brands such as Ubisoft, Activition Blizzard, unikrn and S2Games. Currently busy with his MBA at the University of Cumbria. Activation Blizzard currently trades at (time of publishing this article): USD 75.76+0.03 (+0.04%)Ubisoft currently trades at (time of publishing this article): EUR 75.24-0.50 (-0.66%)
(Just in case you were wondering if there is any hope for eSport/gaming stocks to go beyond $0.20) check this article out.Bert Mondello this guy has extensive experience in the tech start up space. He is also the Chairman of Douugh (DOU), WestStar Industrial (WSI) and Vection Technologies (VR1). You can also check out and read his public LinkedIn.
Basically you check out the rest of the Emerge Gaming team members via this link.
The industry - Potential GrowthThe eSport industry is projected to grow to around $1.65 billion by 2021, with the huge growth in revenue largely being driven by brand sponsorships, media rights deals and advertising sales. Emerge Gaming have already stated that aside from subscriptions they will also optimise their revenue through sponsorships and advertising. Emerge Gaming is already generating revenue and have cash in the bank. Cash at the end of the quarter was ~$2.6M. You can view the most recent full report (at time of publishing this article) via this link.
The Company is targeting a cash outflow of ~$140,000 per month to maintain its operations in the forthcoming quarter. This monthly cash burn does not include any projected revenue amounts to be received, which will offset the expenditure. In comparison, the Company’s cash outflow from operating activities this quarter was ~$117,000 per month. Marketing and other costs are anticipated to ramp up as Emerge looks to support marketing of its live platforms, in that regard, the Company is fully funded.You can also view their most recent company presentation via this link. Ciao.
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