Enthusiast Gaming Stock ($EGLX) — is coming to the NASDAQ - The Average Joe

    Enthusiast Gaming Stock ($EGLX) — is coming to the NASDAQ

    Victor Lei — Head of Research

    Victor Lei — Head of Research

    April 21, 2021

    Enthusiast Gaming stock

    April 21, 2021

    The next media giant in the video game space is coming from the North..

    Over the past year, Enthusiast Gaming stock soared more than 580% on the Canadian stock exchange, the TSX. And starting today, Enthusiast is letting its US neighboring investors in — by listing on the NASDAQ under the ticker $EGLX.

    The Largest Network of Gaming Communities

    Enthusiast Gaming is a media company with over 100+ gaming websites, 1,000+ YouTube channels, 7 esports teams and 30+ virtual events that reach 300m+ gamers worldwide. All its content is targeted towards one person: the gamer.

    How big is the competitive gaming (esports) market? eSports has become an $833m industry serving over 2.7b gamers in the world — with 75% of its sales coming from media rights/advertising according to Newzoo.

    In 2020, the gaming industry from lockdowns that kept consumers at home — helping Enthusiast grow its sales by over 6x in 2020 to $73m with the majority of it (83%) coming from ads.

    Phase 2 of its 3-year growth strategy

    The game plan — make more $$.

    While Enthusiast spent the past 5 years building up a massive audience, its success depends on its ability to monetize its users with its 3-year growth strategy.

    • Phase 2: Sell more ads and increase the price it charges by cutting out adtech platforms (middlemen) and going direct to advertisers
    • Phase 3: Sell its content via licenses and subscriptions — and build off Enthusiast’s 115k+ paying subscribers and licensing partnership with Snapchat.

    While it expects to triple its existing sales in phases 2 and 3, growing further requires more than just selling ads — it requires building out commerce capabilities and an app store (phase 4 and 5).

    For investors… Enthusiast Gaming Stock’s origin story

    At a nearly $1b valuation, Enthusiast Gaming has clearly outgrown its humble beginnings — where it was founded in 2015 as a blog out of a basement.

    With only $73m in sales, Enthusiast Gaming is valued much higher than what traditional media companies would be valued at. Implying that investors are anticipating significant growth… But here’s where things could go wrong…

    • If Enthusiast’s monetization plans fail to reach its targets, its stock could fall.
    • If Enthusiast’s audience consumes less gaming content post-COVID (i.e. actually go outside), ad sales could fall.

    Learn more: Microsoft looks to accelerate its growth with a stronger focus on gaming

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