GMBL Stock Drops 17%; Is Esports Entertainment now a buy?

Esports Entertainment Group Inc (NASDAQ: GMBL) stock price was up over 30% after announcing its exit from the UK market on Nov. 15. However, shares retreated after the mid-week rally, falling to $0.1161 – $0.024 (17.07%). until the end of the closing bell on Thursday, November 17th.

Notably, the company announced that its online casino and sports betting company, SportNation, would cease operations in the UK later this month as the price would go as high as $0.16.

Following the strategic review announced with the company’s financial results on October 13, 2022, investors were relieved by the decision as the betting and online gambling site focused its attention on its core areas.

GMBL chart and analysis

For the last month GMBL has traded between $0.09 and $0.17 which is quite wide. As the stock is currently trading in the middle of this range, some resistance may be found at the top. Specifically, GMBL is facing a resistance zone at $0.13 while a support zone exists at $0.11.

Volume has been significantly higher over the past few days, so price action has been a bit too volatile to find a solid entry and exit point, so it’s probably best to wait for a consolidation first.

At the time of publication, GMBL is trading well below its 20-, 50-, and 200-day simple moving averages (SMA).

GMBL support and resistance. Source. Finviz.com data. See more shares here.

Esports Entertainment Technical Analysis (TA) Summary is in the ‘Sell’ zone as the Moving Averages (MA) indicate a ‘Strong Sell’ at 13 (vs ‘Buy’ at 1 and ‘Neutral’ at 1) , while the oscillators remain in “sell”. neutral” on a 6 with “Sell” on a 6 or “Buy” on a 3.

GMBL 1-day technical analysis. Source: TradingView

On Wall Street, two analysts providing 12-month target prices have forecast GMBL stock to trade at an average price of $0.15, up 29.20% from the last price of 0.12 equals $. Interestingly, the lowest price target is also $0.15, with a consensus rating of Hold based on the stock’s performance over the past three months.

Wall Street analysts price targets for GMBL. Source: TipRanks

The most important facts about the GMBL share

It’s worth noting that while the stock price rose on volume more than 12 times the daily average and is still up +0.01 (10.99%) over the last 5 days, the jump through the announcement that the company would close two of its UK sites at the end of this month to reduce its operating costs.

While the announcement of the closures of RedZone and SportNation, both companies that Esports Entertainment bought in 2020, was obviously greeted with excitement by investors, the company lost around 98% of its value over the past year. It peaked at $6.67 in the previous 52 weeks but only settled at 12 cents on Thursday.

In addition, Esports Entertainment said in the filing that the company had a deficit of $153.3 million at the end of the third quarter and had a history of losses.

Despite the fact that the closure of the above UK firms is a cost-cutting move, the hard truth is that Esports Entertainment certainly needs access to more funding. The question that needs to be answered is whether a creditor will be willing to offer that money.

Buy stocks now with Interactive Brokers – the most advanced investment platform


Disclaimer: The content of this website should not be construed as investment advice. Investing is speculative. When investing, your capital is at risk.

source

Leave a Reply

Your email address will not be published. Required fields are marked *