04 May 2 Meme Stocks with Growth potential!
GameStop Corp. (NYSE: GME), a stock that was struggling after hitting historic lows of under $4 per unit since the past two years, has witnessed an almost miraculous resurgence, aided by the users of a Reddit forum named “r/WallStreetBets”. The stock went on a roller coaster ride and has given rise to a new phenomenon namely Meme Stocks. However, Meme stocks are raising concerns about issues such as the stock bubble, overzealous trading, investor protection and market manipulation.
These stocks do not necessarily have a fundamental reason underlying their popularity, besides the buzz generated on social media platforms, which is why they are risky and unpredictable. While it is clear that these temporary spikes are unrealistic and unsustainable over the long-run, there are some stocks that do offer an attractive upside in the long-run. We take a look at two such stocks below:
Market Cap: $ 320.03M; Current Share Price: 4.24 USD
Data by YCharts
A global digital media Company focused exclusively on Live Entertainment, LiveXLive operates one of the leading live music streaming platforms of the world, besides operating Slacker Radio, a music streaming pioneer. In addition, the Company produces original music-related content such as premium live streams, digital audio, and on-demand music content from top music festivals and concerts around the world. LiveXLive also owns and operates the podcast network PodcastOne and the live events platform React Presents.
Some of events covered by the Company include Rock in Rio, EDC Las Vegas, Hangout music Festival, besides facilitating audience access to premium events, original content, exclusive artist and industry interviews. Furthermore, it offers customers’ access to millions of expert-curated stations through its internet radio service named Slacker, besides a social influencer network named LiveXLive influencers.
The Company has recently signed an agreement with Samsung to have all PodcastOne content distributed free through Samsung’s Listen tab. In December 2019, the Company announced that it had entered into a production and distribution partnership with Samsung. The deal involves capturing 10 live events using Samsung XR app, which enables users to experience tentpole music events through use of cutting-edge technology such as holographic, volumetric video and on-site augmented reality. In addition, LiveXLive will also provide customers access to long and short form VR and 360 content like pilots and artist collaboration as part of the agreement.
In April 2021, the Company entered into a strategic multi-year, multi-million-dollar global partnership with Cybertino, an NFT marketplace for creators and influencers. The deal involves the creation of digital collectables for all of LiveXLive events and also offer the first-ever pay-per-view (PPV) event which will offer an NFT with every PPV livestream purchase of its upcoming Social Gloves: Battle of the Platforms event. LiveXLive also intends to expand its NFT opportunities to music, videos, podcasts/vodcasts, experiences, events and festivals.
Furthermore, the Company increased its revenue guidance for the fiscal year ending March 31, 2022 from $100 million to $110 million and its revenue guidance for the fiscal year ended March 31, 2021 to $64.5 million to $65.5 million. The Company has also reported an addition of over 1.075 million paid subscribers in 2021, LiveXLive live streamed more than 140 live music events and 1,781 artists and generated an impressive 150 million livestream views compared to 42 events, 256 artists and over 69 million livestream views during the same period last year.
LiveXLive has strategic multi-year partnership collaborations with reputed music content providers, with live streaming rights to more than 1500 music festivals and events covering various brands, bands and fans.
According to a report by Grand View Research Inc, the global Video Streaming market will reach an estimated USD 124.57 Billion by 2025, growing at a CAGR of 19.6 percent. The growth is due to the availability of high-speed internet such as 3G, 4G and LTE, which is causing an increase in the demand for online and on-demand content. The emergence of online streaming platforms such as Amazon, Netflix and Hulu are challenging the content dished out by conventional television channels. In fact a report by ResearchandMarkets predicts that the online Music Streaming industry alone will be worth over US$56.7 Billion, growing at an impressive CAGR of 33.6 percent.
This provides the Company with ample opportunities for growth and expansion.
Market Cap: $ 6.54B; Current Share Price: 16.52 USD
Data by YCharts
Skillz is a mobile gaming platform that hosts esports tournaments that have a prize component, essentially allowing users to compete against each other for prize money. The Company uses patented technology to enable developers to create multi-million-dollar franchises and host social competitions that bring together gamers, mobile players and esports enthusiasts worldwide.
The Company’s portfolio of games includes Solitaire cube, 21 Blitz, Blackout Bingo, Pool Payday, Dominoes Gold and 2 Minute Football to name a few. However, it has two prominent developers namely Tether and Big Run and only three games (Tether’s Solitaire Cube and 21 Blitz, and Big Run’s Blackout Bingo) which generate over 79 percent of its revenues.
Skillz has a registered player base of over 30 million and more than 20,000 game developers. The platform hosts more than 3.5 million daily tournaments and disburses over $ 60 million in monthly prizes. Furthermore, the platform enables game developers to create long-term sustainable businesses and offers features such as leagues and leaderboards, multiplayer tournament options and multiple prizes and trophies.
A developer can download a free SDK and set up tournaments on the Skillz platform. In addition, a streamer can broadcast more than 5 live tournaments simultaneously through a dynamic overlay. The platform also allows for in-app payments and analysis of game performance through a single dashboard.
The Company will be reporting its first-quarter 2021 results on May 4, 2021 and its performance is likely to reflect the benefits arising from an increase in its average revenue per user (ARPU), monthly active users and paying monthly active users. The Company’s outlook for 2021, as envisioned by the Company, includes nearly $80 million in Q1 revenue along with 2.6 million Monthly Active Users and 0.45 million Paying Monthly Active Users.
Skillz is redirecting its focus on creating engaging content to attract customers, additionally, the company is also looking at getting sponsorship deals for the tournaments prizes as well as strategic partnerships to enable it to expand to new verticals and geographies. In February 2021, the Company entered into a multi-year gaming agreement with the National Football League (NFL) to host a global game developer challenge to develop an NFL-themed mobile game.
The advent of the Smartphone has revolutionized the gaming industry. There is an exponential rise in the number of gamers, which now stands at about 2.3 billion gamers worldwide. According to a report by Newzoo, the global games market which was valued at $137.9 billion in 2018 is likely to reach $180.1 billion in 2021, growing at a CAGR of 11%. Mobile games will contribute to 59 percent of the total or over $106.4 billion by 2021. Mobile and Tablet gaming alone contributed to over $70.3 billion in 2018.
The Global esports market revenue is projected to reach 1.62 billion U.S. dollars in 2024 from 1.08 billion U.S. dollars in 2021 according to a report. The growth in the industry will be primarily driven by the growing popularity of gaming in the mainstream culture, technological advancements and improved infrastructure, the emergence of professional esports teams and leagues and the impact of COVID-19 on the gaming industry.
The Company looks well poised to make the most of these opportunities and create an impression on the esports market.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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