Author Topic: GAN - GameAccount Network  (Read 1609 times)

valueinvestor

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GAN - GameAccount Network
« on: May 21, 2020, 02:41:13 PM »
I was not actively looking for another investment opportunity, but perusing through new IPO/Spin-offs, I found GAN. Typically I wait, as 9/10 times in my experience, IPO's go down at least 25% or more.

However, I'm not sure if this will because they moved to another exchange because their prior exchange undervalued and had little liquidity.

They provide a very valuable service in a very fragmented market with huge barriers to entry with more regulations coming through from what I see.

GameAccount Network is a B2B SaaS company providing end-to-end solutions for online gambling. So far they are experiencing great growth with their US Sports Betting and I think COVID-19 will only increase demand.

They're growing revenues by 100%+ and 2019 EBITDA is around $6-7M now, but with current growth rate and other levers, it's not unforeseeable to see GAN trading at Single Digit 2020 EBITDA now. Especially with the tailwind.

I'll only have a small position atm, but I can see this becoming a large position when I understand the engine that drives this business/stock.

I will look into this further and provide an update, but thought we can look at this together.

I only initiated a position, because their position is very unique by switching exchanges, so management thinks they will be valued higher. They only listed recently - on May 1st, 2020 and it seems to be flying under-the-radar.


EricSchleien

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Re: GAN - GameAccount Network
« Reply #1 on: May 21, 2020, 03:24:57 PM »
This is now my largest position mostly due to the price being up 5x since I doubled down. I've actually done a few podcasts on it which you listen to here:

1) https://www.youtube.com/watch?v=32cK-eJo9QU
2) https://ericschleien.com/podcast/coronavirus-investing-gan/
3) https://ericschleien.com/podcast/jeremy-raper-credit-based-equity-investing-japanese-stocks-shinoken-gan-nio/

valueinvestor

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Re: GAN - GameAccount Network
« Reply #2 on: May 21, 2020, 03:45:12 PM »
This is now my largest position mostly due to the price being up 5x since I doubled down. I've actually done a few podcasts on it which you listen to here:

1) https://www.youtube.com/watch?v=32cK-eJo9QU
2) https://ericschleien.com/podcast/coronavirus-investing-gan/
3) https://ericschleien.com/podcast/jeremy-raper-credit-based-equity-investing-japanese-stocks-shinoken-gan-nio/

You’re a gem!  ;D

EricSchleien

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Re: GAN - GameAccount Network
« Reply #3 on: May 21, 2020, 04:06:23 PM »
This is now my largest position mostly due to the price being up 5x since I doubled down. I've actually done a few podcasts on it which you listen to here:

1) https://www.youtube.com/watch?v=32cK-eJo9QU
2) https://ericschleien.com/podcast/coronavirus-investing-gan/
3) https://ericschleien.com/podcast/jeremy-raper-credit-based-equity-investing-japanese-stocks-shinoken-gan-nio/

You’re a gem!  ;D

It's the CoBF community which is a gem :) I'm just doing my part and contributing where I see opportunity to do so. Hope that gives you a bit more light into the situation and saves you some research time.

Nomad

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Re: GAN - GameAccount Network
« Reply #4 on: May 21, 2020, 07:58:36 PM »
I initiated a mid-size position in GAN when it was still trading on the London AIM and held through the company's IPO on the NASDAQ. I recently sold about half of my stake, as it has run up nicely and I have a strong preference for cash at the moment.

I do think that it offers an attractive risk-reward ratio if you believe that the company will be able to successfully diversify its revenue streams. GAN's main risk is customer concentration - they derive a large part of their revenues from contracts with FanDuel. You also have the double-edged sword of the Smurfits' ownership - the CEO alone owns around 10% of the shares and while that aligns incentives, there's also the risk that the Smurfit family treats the minority shareholders as a piggy bank rather than as true partners. I don't think it's a huge worry at this point, but it's something to watch.

Overall, I have been pleased with the recent operating results. GAN has a decent moat - there are few pure-play B2B gaming service providers and they have been fastidious in handling the legal aspects of licensing in the various states where they operate. If they continue to execute, I think the results for shareholders will be satisfactory, even from this entry point.

arcube

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Re: GAN - GameAccount Network
« Reply #5 on: May 21, 2020, 10:22:48 PM »
Watch this video by CEO as well. Good background.

https://www.youtube.com/watch?v=VGIAv36KMbk

valueinvestor

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Re: GAN - GameAccount Network
« Reply #6 on: May 22, 2020, 02:34:07 PM »
Thanks All! I'll get back if I have any insights to offer - hopefully before the stock jumps.

Did anyone try their service? or know anyone he did in the past?

valueinvestor

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Re: GAN - GameAccount Network
« Reply #7 on: May 28, 2020, 07:00:47 AM »
I was too late - stock jumped 15%+ - not sure why?  ???

Castanza

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Re: GAN - GameAccount Network
« Reply #8 on: May 28, 2020, 07:20:02 AM »
I was too late - stock jumped 15%+ - not sure why?  ???

GMBL also jumped 15%

edit: just pointing out everything in that sector seems to be up big today.

https://seekingalpha.com/news/3578229-cordish-gaming-taps-gan-for-software-platform-of-internet-gambling-in-pennsylvania
« Last Edit: May 28, 2020, 07:50:53 AM by Castanza »

EricSchleien

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Re: GAN - GameAccount Network
« Reply #9 on: May 30, 2020, 10:16:13 AM »
This has been an 8-bagger for me in some of the accounts I manage. I wrote about the company quite extensively to my investors earlier in the year. Happy to share privately with anyone.

On an interesting side-note- I have been seeing a lot of commercials in Philly recently for FanDuel. Last few weeks, they come on now all the time.