{"id":243595,"date":"2022-11-16T16:47:46","date_gmt":"2022-11-16T22:47:46","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=243595"},"modified":"2022-11-16T17:22:59","modified_gmt":"2022-11-16T23:22:59","slug":"esports-entertainment-group-facing-debt-repayment-issues","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/","title":{"rendered":"Esports Entertainment Group Closes UK Sites, Analyst Pulls Coverage"},"content":{"rendered":"

Shares of Esports Entertainment Group, Inc. (NASDAQ:GMBL), a tiny online gaming and sports betting company, jumped 11.82% today on volume that was more than 12 times the daily average. That leap came on news the firm is shuttering two of its UK sites at the end of this month in a bid to conserve capital.<\/p>\n

\"Esports
A profile of Esports Entertainment Group. The gaming company is facing going concern issues. (Image: YouTube)<\/figcaption><\/figure>\n

While news of the closures of RedZone and SportNation — brands Esports Entertainment purchased in 2020 — was clearly met with enthusiasm by investors, the stock lost nearly 98% of its value over the past year. Its 52-week high is $6.67, but it closed at 14 cents today. Adding to the stock\u2019s woes, an analyst yanked coverage of the gaming equity.<\/p>\n

Following GMBL’s recent exit from several eSports related business in order to preserve liquidity, we are dropping coverage,\u201d<\/strong> wrote Roth Capital analyst Edward Engel in report to clients. \u201cGMBL has been struggling to remain a going concern since 1Q22 Shares of GMBL were previously Neutral rated, with a $0.45 price target. Effective with this note, all prior estimates, rating and price target are no longer relevant and should not be relied upon.\u201d<\/strong><\/p><\/blockquote>\n

Esports Entertainment Group is one of several small gaming companies currently grappling<\/a> with going concern questions.<\/p>\n

Esports Entertainment May Be on the Brink<\/h2>\n

In its 10-Q filing with the Securities and Exchange Commission (SEC) dated Nov. 14, Esports Entertainment confirms its ability to continue as a going concern is up in the air. One reason for that is the gaming company\u2019s inability to service debt.<\/p>\n

\n

Adding to investors\u2019 concerns about the company\u2019s financial state, Esports Entertainment is attempting to renegotiate the terms of a convertible debt offering<\/a>. That offering gives bondholders rights to convert to stock at $17.50 a share \u2014 a price the stock hasn\u2019t traded at in over a year. That convertible offering was worth $35 million<\/a> and matures in June 2023.<\/p>\n<\/div>\n

\u201cThe company has not maintained compliance with certain debt covenants, and is currently in default under the terms of the senior convertible note,\u201d <\/strong>according to the regulatory filing.<\/p>\n

Esports Entertainment added in the filing it has a deficit of $153.3 million as of the end of the third quarter and a history of recurring losses.<\/p>\n

Esports Entertainment Needs More Cash<\/h2>\n

While closing the aforementioned UK businesses represents a cost-cutting measure, the stark reality is Esports Entertainment likely needs access to more capital. The issue is whether or not a creditor will be willing to step up to provide that cash.<\/p>\n

\u201cThe Company believes that its current level of cash and cash equivalents are not sufficient to fund its operations and obligations without additional financing,\u201d according to the 10-Q. \u201cAlthough the Company has financing available, as further described below, the ability to raise financing using these sources is subject to several factors, including market and economic conditions, performance, and investor sentiment as it relates to the Company and the esports and iGaming industry. The combination of these conditions was determined to raise substantial doubt regarding the Company\u2019s ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements<\/strong>.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Esports Entertainment Group, Inc. (NASDAQ:GMBL), a tiny online gaming and sports betting company, jumped 11.82% today on volume that was more than 12 times the daily average. That leap came on news the firm is shuttering two of its UK sites at the end of this month in a bid to conserve capital. […]<\/p>\n","protected":false},"author":46,"featured_media":243605,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3312,10],"tags":[82156,81903],"acf":[],"yoast_head":"\nEsports Entertainment Group Facing Debt Repayment Issues<\/title>\n<meta name=\"description\" content=\"Esports Entertainment Group analyst pulls coverage as going concern woes rise.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Esports Entertainment Group Facing Debt Repayment Issues\" \/>\n<meta property=\"og:description\" content=\"Esports Entertainment Group analyst pulls coverage as going concern woes rise.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-16T22:47:46+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-16T23:22:59+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/EEG.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/\",\"url\":\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/\",\"name\":\"Esports Entertainment Group Facing Debt Repayment Issues\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/EEG.jpg\",\"datePublished\":\"2022-11-16T22:47:46+00:00\",\"dateModified\":\"2022-11-16T23:22:59+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Esports Entertainment Group analyst pulls coverage as going concern woes rise.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/esports-entertainment-group-facing-debt-repayment-issues\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/EEG.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/EEG.jpg\",\"width\":1280,\"height\":720,\"caption\":\"A profile of Esports Entertainment Group. 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