Published on: December 28, 2022, 02:26 am.
Last update: December 28, 2022, 02:42.
Elys Game Technology (NASDAQ: ELYS ), a gaming technology provider, entered Wednesday’s trading session with a market cap of just $7.61 million and a year-to-date loss of 87.79%, but the company says those statistics indicate that financial markets are not fully appreciating the underlying investment thesis.
In a letter to investors today, Elys Executive Chairman Michele Ciavarella highlights a variety of issues, including the company’s path to profitability and why its small market cap belies what it frames as an attractive fundamental outlook.
The current value of our capital does not credit the value of our cutting-edge betting technology and engineering talent, our growing and profitable operations in Italy, or our future growth potential, particularly in the US market and other global markets “, wrote. Ciavarella.
He added that the Elys share price remains low “due to circumstances beyond our control” and that is affecting shareholder value. Elys shares are volatile. The stock traded at about 36 cents on Wednesday. At the time of writing, it is down 27.65% in late trade, but up 184.62% over the past week and 84% over the past month.
Expansion, key kiosks for Elys game technology
Elys Game Technology is a technology provider, but is lumped in with sports betting stocks because the company provides sports betting kiosks to businesses, such as bars and restaurants, that hold permits to offer sports betting to customers.
We currently have 7 signed locations in Washington DC, 2 in Maryland, 1 in New Jersey and 6 tribal casino customers in 4 other states and through our agreement with the Ohio Lottery we have already signed over 100 host retail locations for to offer sports betting alongside. their existing lottery kiosks in Ohio,” according to Ciavarella’s letter.
Elys is also supplying sports betting kiosks and related technology to a strip club in Washington, DC, which will become the first such venue in the city to offer sports betting to customers. While that represents new business, the US capital hasn’t excited Elys investors so far, although Ohio may. Sports betting is scheduled to appear there in early 2023.
“With our planned Ohio project underway in the coming months, we believe the company is at a key inflection point for future success and reevaluation,” Ciavarella wrote. “Indeed, we believe there may be significant opportunity in current and future operations that is not currently included in our market assessment.”
Other points in favor of Elys
With its trades below $1, Elys could be a candidate for a delisting notice from Nasdaq and could also face the specter of a reverse split, but there are some potentially attractive fundamentals that could support equity growth, including international exposure.
Through an agreement with Italy’s Lottomatica, Elys has geographic diversity. Perhaps more importantly, the company does not have massive debt obligations, as so many gambling operators are.
“In particular, the company’s strength lies in the absence of significant debt on our balance sheet and the successful strategic execution of our cost containment exercises,” Ciavarella concluded.