FansUnite Releases Long Awaited Earnings: Can The Stock Build Momentum?

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The market has been waiting patiently. Fansunite Entertainment FANS has released Q4 and full year 2021 financial results. On May 2, 2022, FANS stock was up nearly 2% but at one time, was over 7% with a trading volume of over 900,000 shares traded.

Before we get to the numbers and the chart, a quick refresher about Fansunite.

FansUnite is a sports and entertainment company, focusing on technology related to regulated and lawful online sports betting, esports betting, casino and fantasy. Its mission is to be a leader in the gaming industry by providing their partners and players the industry’s most versatile and vertically integrated platforms with a portfolio of unique products and a focus on esports, sports betting, casino and the next generation of bettors.

Chameleon is a complete business-to-business (B2B) sports and esports white label iGaming platform offering turn-key and API solutions.

Askott Games, Askott Entertainment’s newest division, is responsible for the development of exclusive casino-style RNG games with esports and video game themes. In addition to offering its solutions to partners via the Chameleon platform, Askott games also license its games to external casino aggregators, connecting the division with hundreds of online casinos and sportsbooks.

McBookie is a leading provider of regulated betting services in the United Kingdom (UK). McBookie has been operating in the UK market since 2009 and is recognized for its sports betting, casino, and virtual sports offerings. At the time of acquisition, McBookie boasted approximately 10,000 active members and handled a total of CAD$340 million in betting since its inception. Additionally, in the last three years, McBookie has taken over CAD$135 million in betting volume onto its platform.

FansUnite subsidiary American Affiliate (AmAff) is making bank. AmAff produced CAD$1.88 million in revenue from its betting affiliate network during March Madness, with margins over 30%. In terms of retail activation, their Betting Hero brand guided ambassadors to dozens of sportsbooks, bars and other venues across 14 states, to help thousands of consumers through creating, funding and betting with an online sportsbook in March.

“Our American Affiliate division continues to deliver strong operational results around major U.S. sporting events, highlighted by the revenue generated by the team over the span of the first two weekends of the NCAA Men’s Basketball Tournament. March Madness is one of the most anticipated and viewed sporting events in the United States, and naturally, it is immensely popular among sports bettors, which bodes well for AmAff’s betting affiliate operations,” said Scott Burton, CEO of Fansunite.

For those looking at a potential catalyst involving FansUnite activity in Canada, look no further than the Province of Ontario.  Ontario has become the first Canadian province to open a legal private online gambling market. As of April 4, 2022, People in Ontario can wager on casino games, sporting events and other gambling activities on apps and websites approved by the regulator. Ontario is the big market now, and companies are ramping up the advertising to grab a share of Canada’s largest province. Sources estimate the Ontario market could be worth up to $800 million annually.

Guess what? FansUnite has received a Gaming Related Supplier- Manufacturer license from the Alcohol and Gaming Commission of Ontario (AGCO) allowing FansUnite to become a fully registered supplier of sports betting and the internet gaming in Ontario.

“We are pleased to receive approval from the AGCO to operate as a sports betting and iGaming solutions supplier within Ontario,” said Scott Burton, CEO of FansUnite. “As we scale our operations, we are focused on both the domestic and international markets. The gaming-related supplier license will enable us to gain an early-mover advantage within the Canadian online gambling industry as a betting solutions provider for new sportsbooks and online casinos looking to enter the market. We look forward to continuing to work with iGaming Ontario in delivering cutting-edge betting solutions in compliance with AGCO regulations.”

Want more expansion? FansUnite is expanding into Wales. FansUnite is entering a long-term licensing agreement with Lovell Brothers limited, owners of Dragon Bet to launch a new online sports betting portal, which will be powered by FansUnite's chameleon iGaming platform.

Dragon Bet will license FansUnite’s Chameleon white-label betting software for its new online platform, which will launch in the U.K. later this year and include betting products that are customized for Welsh sports betting fans. Utilizing FansUnite’s Chameleon iGaming platform, Dragon Bet plans to grow its loyal customer base to become the leading bookmaker in Wales.

The U.K. alone is expected to generate an estimated £12.5 billion in gambling and betting activities revenue in 2022. And remember, FansUnite already operates in the UK with McBookie.

Recently, FansUnite reported Q4 21 and full year 2021 financial results. Here are highlights:

• Total revenue of C$5.60 million in full year 2021, as compared to C$1.56 million in full year 2020, an increase of 260%;
• Total revenue of C$2.98 million in the fourth quarter of 2021, as compared to C$0.76 million in the fourth quarter of 2020, an increase of 294%;
• Net loss for the year of C$17.0 million which includes non-cash expenses of C$7.59 million, as compared to C$13.5 million in full year 2020, which included non-cash expenses of C$9.10 million;
• The Company ended the quarter with cash and cash equivalents of C$13.97 million, as compared to C$4.43 million in 2020, an increase of 215% from the same period last year.

"Our annual figures illustrate that FansUnite's global gaming strategy continues to be a success and represents a major step forward for the Company," said Scott Burton, CEO of FansUnite. "In 2021, our focus was on laying operational foundations and ensuring we secured the right amount of capital to not only grow our revenue and operations, but also to see us through any market downturns. The additional capital allowed us to complete our third and largest acquisition of American Affiliate, which has outperformed our expectations since finalizing the deal at the end of 2021. In 2022, FansUnite intends to secure more B2B deals, both for our Chameleon iGaming platform and our RNG casino games, while expanding our footprint in the US affiliate market. We are very excited to build on this success with a focus on continued revenue growth, international and domestic expansion, and execution."

I first want to show you the chart from a wide perspective. The stock hit highs of $2.37 in early 2021, and the stock has been downhill ever since. Many multiple support zones have been broken, and recently, the most major support broken has been $0.33.

Zooming into the chart, and we see how important $0.33 is. This zone is the current resistance or price ceiling. From a technical basis, we need to close back above $0.33 to confirm a reversal and a new uptrend. The stock initially popped on earnings but has given most of it back. The market did not react to earnings as much as bulls would have liked.

I am watching $0.25. It is an important psychological support zone for stock prices under $1.00. We have seen the stock develop some support here in the past three trading days before earnings. However, on the charts, I see a better support zone at around $0.225. If we do head lower to test this support, then I would wait for multiple candles to develop and indicate that the selling pressure has dissipated.

Authored by Vishal Toora, Equity.Guru

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.