Over the last two weeks, we looked at some of the big players in the online gambling market space and we realized most if not all the companies have focused on expanding their portfolios by way of acquisitions of intangible assets depressing their cash reserves and punishing their P&L statements in the process. This week I thought we could take a break and just go over a traditional sector round-up for the e-sports sector and focus on significant news and events for four major firms.
Axion Ventures (“AXV”)
Axion Ventures wins a court case against the former CEO.
Axion Ventures an investment issuer primarily focusing on investments in the online video gaming sector and other information technology sectors have received the written judgement of Justice Ross of the Supreme Court of British Columbia dated Oct. 1, 2021, for case S209078.
The case was entirely dismissed on merits in favour of the company and its respondent directors. The judgement found that the firing of the company’s former chief executive officer John Todd Bonner and his wife(“Jess”), who currently is the co-chairman and co-chief executive officer of NextPlay Technologies Inc., respectively, was necessary based on their conduct concerning their secret transaction to create NextPlay in concert with Monaker Group via a letter of intent, discovered by the company’s board.
The judgement specifically acknowledged the company’s position.
“There are some issues that are so serious they require the employer to ‘walk the employee to the elevator’ and this was such a situation as ‘the company had to be protected from the employee.'”
Justice Ross further delivered:
“In my opinion, having taken those steps, in secret, it is inconceivable that Jess and Mr Bonner did not reasonably expect dire consequences if the majority directors discovered the existence of the Monaker LOI. Put simply, the fact that the petitioners kept the existence of the Monaker LOI secret from the majority of directors establishes that they expected negative consequences if it was disclosed. That inference is inescapable.
“It is clear that any delay in Mr. Bonner’s termination could have led to negative consequences for the shareholders. The petitioners must have, or should have, expected that the majority directors would immediately terminate Mr. Bonner as CEO.
“The discovery of the Monaker LOI created a situation where the directors reasonably believed that they had to protect the company from Bonner and thus immediately fire him, and this was not oppressive or unfairly prejudicial to Bonner.
“As noted, there are certain actions that require immediate termination of an executive. I find the facts of this case fit into that category.
“The majority directors discovered the existence of the Monaker LOI. They were immediately concerned for the best interests of the company and its shareholders.
“On that basis, I find that the majority directors had an honest belief that the Monaker LOI would have a negative impact on Axion and its shareholders. They had reasonable grounds for that belief.”
The company and its directors are pleased to be categorically exonerated by the British Columbia Supreme Court.
The stock currently is at a bid of $C0.2 per share and is down 66%.
Bragg Gaming Group Inc
Bragg customer Holland Casino goes live with Oryx Hub
Oryx, a Bragg company, has gone live with Holland Casino in the Netherlands after the operator was awarded one of the first 10 licences announced by the Dutch regulator.
Holland Casino has been operating land-based casinos in the Netherlands since 1976 and runs 14 assets across the nation. They have an instantly recognizable brand in the region, and it is fully owned by the Dutch state and employs around 3,500 people.
To supply Holland Casino’s brand-new online offering, Oryx will integrate with the Playtech Marketplace platform, the operator’s i-gaming technology partner.
The stock is down 49% in the last 6 months and up 6% in the last 3 months.
Enthusiast Gaming Holdings Inc
Enthusiast Gaming to release Q3 2021 results Nov. 10
Enthusiast Gaming Holdings Inc. will release its financial results for the third quarter ended Sept. 30, 2021, on Wednesday, Nov. 10, 2021, after market close.
Management will host a conference call and webcast on Nov. 10, 2021, at 5 p.m. ET to review and discuss the third quarter 2021 results.
Not as exciting for new shareholders but current stock owners will be wondering what their business has done over the last three months. The stock is down 37% in the last 3 months and made $C37 million in sales in Q2 2021 and $C30 million in Q1 2021. Analysts are expecting sales to come in at $C41 million an 140% YoY increase with an average price target of $C11 per share.
There are five analysts who have a buy rating and four analysts who have an outperform rating with the highest price target being $C12 per share.
Engine Gaming and Media Inc
Engine Gaming gets OK to buy back up to 777,165 shares
The TSX Venture Exchange has accepted Engine Gaming’s notice of intention to implement a normal course issuer bid (NCIB).
Engine may, during the 12-month period commencing Nov. 1, 2021, and ending Oct. 31, 2022, purchase up to 777,165 common shares, being approximately 5% of the outstanding common shares of the company. The NCIB shall terminate on the earlier of Oct. 31, 2022, and the date on which the maximum number of common shares purchasable under the NCIB is acquired by the company.
The NCIB will be conducted through Canaccord Genuity, a member of the exchange, and made in accordance with the policies of the exchange.
The price which the company will pay for any such common shares will be the market price at the time of acquisition. As of today, the market price for the stock is $C4.96 per share and have an average traded volume of 191 thousand shares over the last three months. Assuming a ‘simple’ market it would take about a year to buy the stock without affecting the bid price too much. The total cost to the firm would be in the $C3 million range. Currently, the company has 7 times the cash in their books to cover their share repurchase program and meet their interest payments.
The company believes that, from time to time, the market price of its common shares may not fully reflect the underlying value of the company’s business and its prospects. Accordingly, the company believes that having the ability to purchase its common shares will be in the interest of the company and represents an opportunity to enhance shareholder value.