GMBL - eSports Entertainment Group Inc. (GMBL) - Cash Influx Brings Breathing Room

Completes capital raise. The company completed a secondary offering of 15 million shares at $1 and 15 million warrants, convertible into common stock at $1 per share. We estimate that the net proceeds from the offering is $13.8 million. Brings financial flexibility. We believe that the capital infusion will breathe life into the company's growth strategy, potentially enough capital until the company swings toward positive cash flow in 2023, based on the current burn rate of $1.3 million per month. We are maintaining our fundamental analysis of 1, the lowest rating, until there is better visibility on the company's swing toward positive cash flow.Lowering price target. Given the substantial increase in shares outstanding, we are lowering our price target from $4 to $1.50. Our revised price target takes into account fully diluted shares outstanding estimated to be 53 million and the influx of $13.8 million in cash. Our price target is based on a multiple in line with the current peer group multiple of 1.5 times EV to Revenues. Read More >>