Mobile Global Esports (NASDAQ:MGAM) — perhaps better known as “Mogo” — is making some waves on Friday. That’s as the company goes public and with MGAM stock soaring higher as a result.
On Friday morning, Mobile Global Esports offered 1.5 million common shares at $4.00 per share. The initial public offering (IPO) will net the company roughly $6 million net of fees. Additionally, there’s a 30-day over-allotment option to purchase another 225,000 shares or 15%.
If the ticker sounds familiar, that’s because MGAM stock was previously public. Then known as Multimedia Games, the company was acquired for $36.50 a share in all-cash deal valued at $1.2 billion.
These are not the same companies, though.
Mobile Global Esports is a company focused on e-sports and is headquartered in San Clemente, CA. However, its main focus is on India’s esports market. From the company: “Global eSports is a Professional eSports Organization that owns teams across the globe in various titles such as CS:GO, DOTA 2, Fortnite, Overwatch, PUBG, Rainbow Six Siege, Apex Legends, etc.”
While investors may be skeptical about what the future holds for e-sports, it’s clearly gaining momentum. For instance, e-sports will make its debut in the Asian Games, which was postponed until September 2023 due to Covid-19. The Asian Games “is a continental multi-sport event held every four years among athletes from all over Asia.”
MGAM Stock Hits Wall Street With a Bang
Given the weakness in the broader market, making a public debut at this time is no easy task. In the days leading up the Mobile Global Esports debut, the company upped the number of shares for sale but lowered the IPO price.
The company was originally planning to sell 1 million shares between $6 to $6.75 a share. At the midpoint, that would have brought in about $6.37 million in proceeds. However, the company chose to sell 1.5 million shares between $4 to $5 a share and ultimately priced at the lower end of its range.
As previously mentioned, this netted the company about $6 million in proceeds. That said, MGAM stock has traded quite well so far this afternoon. Shares spent most of the morning chopping between $4 and $5.25. Since 1:30 p.m Eastern though, the stock has really gained momentum.
At last check, shares were trading north of $10 a share, up 150% from the IPO price. It currently sports a session high price of $12.49 a share.
Investors who were willing to take a gamble on an IPO amid a bear market are getting paid for their risk-taking today. It helps that the Nasdaq is enjoying its third-straight daily rally in excess of 1%.
Although investors may want to exercise some caution. Mobile Global Esports has “not reported income from operations and had no significant revenue-generating operations as of March 31, 2022,” while “MGAM was first organized in March of 2021.” Although, “the firm said the IPO will provide enough cash to meet its needs for about two years.”
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
