Earnings season is clobbering me with news once again this week, so there’s a lot to share… I’ll start with the actual transactions I made today, and move on to look at a dozen other stocks I own or am watching… buckle up!
We’ll start with the one that probably most of you can’t easily buy, just to get it out of the way… Modern Times Group (MTG-B in Stockholm) reported a pretty good quarter, but more importantly they’re involved in a strategic review and are thinking about getting out of the gaming business, where they are doing OK but where they come up against much larger competitors, so they can focus more completely on eSports (operating leagues and events), which is their real strength and their faster-growing business.
They’re calling this a “strategic review of the gaming vertical,” and somewhat hidden in that language is also the indication that they are not only pursuing some different options to make themselves “even more competitive,” possibly including a joint venture or a sale of their game publishing businesses, abut that they will also explore a US listing. Which could be quite huge for them as they try to get investor attention for their leading properties in eSporting events, though it’s obviously also an expense.
Here’s a little excerpt from CEO’s commentary on the conference call (transcript here, presentation here):
“We have the opportunity to establish MTG as a global leader in esport industry, and we will accelerate value creation by further combining and extracting synergies in our ownership of the 2 strongest esports brand globally, aided by our solid financial position and commercial operational expertise.
“Within the context of the strategic review, we will also explore an additional listing in U.S., one of the biggest and most important esports markets in the world.
“After the completion of our strategic review, we intend to assess our financial principles and cash requirements going forward in accordance with the company’s strategy of growing organically and through acquisitions. The outcome of the review could lead to potential redistribution of any excess cash to our shareholders.”
It’s awfully early in the process of building out eSports as a business, but Modern Times Group through its ESL and Dreamhack events has been doing it for longer than most, developing a strong brand and a good following that continues to draw well — and, perhaps more importantly, ...