The Esports Entertainment Group Inc (NASDAQ: GMBL) stock price rallied 36.6% after announcing its exit from the UK market. The company said that its SportNation online casino and sports betting company would cease operating in the UK at the end of November.
YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The company noted that the decision resulted from a strategic review of its operations, after which a careful consideration of all factors prompted the decision. In addition, the company noted that the economics of running a small igaming business in the UK was not conducive in a market dominated by much larger companies.
Investors were relieved by the decision as the betting and online gambling site shifted its focus to its core markets following the strategic review announced along with the firm’s Q2 earnings results on October 13, 2022.
Esports Entertainment has already signed a letter of intent with another company that will acquire its Spanish business to focus on its core markets. The company has two offices in Malta and Estonia but has team members located all across the globe working remotely.
During its Q2 earnings report, Esports Entertainment revealed a loss of $4.1 million attributable to common shareholders, marking a slight improvement from the $4.8 million loss it incurred in fiscal Q4 2022 and the massive loss of $63.8 million recorded in the Q3 fiscal year 2022.
Most of the company’s losses are driven by asset impairment charges, which explains why it is getting rid of some of its business units. Many hope that the strategic divestiture of its less profitable entities will put the company on the path to profitability.
However, only time will tell whether the strategy will be successful. GMBL shares have fallen 96.47% this year, and many shareholders hope the stock will recover as the company charts a new path forward.
*This is not investment advice.
Esports Entertainment (GMBL) stock price.
The Esports Entertainment (GMBL) stock price rallied 36.58% to trade at $0.1710, rising from Tuesday’s closing price of $0.1252.