Bragg Gaming Group IPO (BRAG) Stock

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Contributor, Benzinga
August 31, 2021
$5.99
-0.13[-2.12%]
Last update: 4:49PM (Delayed 15-Minutes)
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Vol / Avg.0 / 60.117KMkt Cap137.791M
Day Range- - -52 Wk Range2.920 - 7.000

Setting aside the derision that followers of the meme stock phenomenon often generate from Wall Street’s old guard, one of this year’s hottest trends carries a vital lesson: At the end of the day, the gambling bug can captivate just about anyone. Certainly, proponents of iGaming — or online wagers on the outcome of games, events or activities — are betting on this very thesis.

As investors seek to profit from this burgeoning market, Bragg Gaming Group has recently attracted massive interest. With the company’s recent uplisting to a major U.S. exchange, Bragg shares belong on your must-watch list.

When is the Bragg Gaming Group IPO Date?

On Aug. 27, 2021, Bragg Gaming Group, which is headquartered in Toronto, Canada, made its U.S. public market debut, with its shares trading on the Nasdaq exchange under the ticker symbol BRAG. Though the introduction features similarities with a traditional initial public offering (IPO) — including a date on the official IPO calendar — it’s not quite the same thing.

Technically, an IPO is the first time a formerly private enterprise’s equity units are distributed to outsiders. But in this case, BRAG stock has been trading hands since April 2015. Earlier this year in January, Bragg Gaming’s management team proudly declared that its stock received an uplisting to the Toronto Stock Exchange, Canada’s premiere investing platform. The promotion became official on January 27.

Later, on August 25, Bragg released a statement announcing that the Nasdaq approved its listing request. Prior to the uplisting, American investors could acquire Bragg shares but only through the over-the-counter (OTC) market (formerly under the ticker symbol BRGGF). The iGaming firm will still retain its listing on the Toronto Stock Exchange under the same ticker name BRAG.

Typically, public enterprises seek to uplist to a major exchange for visibility reasons. When most people seek investment opportunities in equity-based securities, they look to major exchanges like the Nasdaq or New York Stock Exchange. Rarely do they sift through the names of OTC stocks, also known as penny stocks.

Contrary to common assumptions, OTC stocks don’t trade through exchanges but rather through broker-dealer networks. Because of this circumstance, volume tends to be low (because fewer people are aware of the opportunity) and as a result, the bid-ask spread — the price you pay for a stock versus the price you can receive for selling it — is unfavorably wide for the speculator.

So, while an uplisting from the OTC market is technically not an IPO, in a sense, it is because without promotion, fewer people would hear about the equity unit in question.

Bragg Gaming Group Financial History

From a bird’s eye view, Bragg Gaming Group may not immediately strike you as the most compelling brand to wager on in the high-potential iGaming market. According to long-term financial data provided by Gurufocus.com, the company took quite some time to generate traction. For instance, Bragg posted only $30,000 in revenue for its fiscal year ended March 31, 2007. It wasn’t until 2015 that the gaming enterprise crossed into 7-digit sales at $1.5 million.

That said, 2019 represented a banner year for the iGaming firm, posting $29.6 million in revenue, up 253% from 2018’s tally of $8.36 million thanks to key acquisitions. In 2020, Bragg sparked additional momentum, ringing up $56.6 million in revenue. Because of the COVID-19 crisis, Bragg and other online entertainment platforms benefitted from a hostage audience situation.

Indeed, the World Economic Forum noted that “COVID-19 is taking gaming and esports to the next level,” in part to the flexibility and low-cost, high-return marketing dynamic inherent in online competitions. As a prime example, auto racing league “NASCAR has been one of the most successful sports to augment cancelled events with its iRacing Series, with one event attracting a peak of 1.3 million viewers.”

While many societies are eyeballing a return to normal once the delta variant of the SARS-CoV-2 virus fades into the rearview mirror, such a circumstance would likely have no negative impact on BRAG stock. After all, whether the wagers occur against online competitions or live sporting events, it’s the gambling — not the channel through which it occurs — that matters.

Indeed, recent financial evidence suggests that Bragg Gaming has been building momentum, even as COVID restrictions loosened up in North America. In the company’s Q2 2021 earnings report, it posted revenue of 15.5 million euros (or roughly $18.3 million), up almost 28% from the year-ago quarter.

Bragg Gaming Group Potential

To be completely transparent, BRAG stock is not without risks. Certainly, critics will point out that the growing number of eager competitors in the iGaming space should make life difficult for Bragg Gaming. And the company’s financials reflect the challenges ahead, with the gaming enterprise consistently posting net losses year in and year out. Plus, the expansion of said losses over the trailing three-and-a-half year period cannot be the most comforting thought to prospective buyers.

But it’s also fair to raise the counterargument: when you invest in a security, you’re not investing in the issuing company’s past nor its present but its future. And the future of iGaming is more than enough for many speculators to accept the risks involved with BRAG stock.

According to Goldman Sachs (NYSE:GS), the financial institution estimates that the “combination of favorable legislation and consumer adoption to drive growth in U.S. online sports betting and internet gambling” will see the domestic iGaming sector expand to $14 billion in 2033 from $1.5 billion in 2021, equating to a 27% compound annual growth rate during the aforementioned periods.

Enlarge the map to encompass the global iGaming market and you’re talking an almost-unignorable upsized potential. Data from Transparency Market Research reveals that by 2024, the industry could command a valuation of $100 billion. For context, the worldwide iGaming sector in 2016 was worth nearly $41.8 billion, representing twofold growth in less than a decade.

How to Buy Bragg Gaming Group IPO (BRAG) Stock

Under normal IPO circumstances, financial underwriters facilitate the first sales — called the primary market transaction — of newly issued shares between the soon-to-be-public company and a community of investors. However, the latter tends to be institutional players such as mutual funds, forcing retail investors to buy shares on the open market (secondary market transaction).

However, since an uplisting is not an IPO, regular folks can acquire shares at any time, either when they’re listed in the OTC market or following the promotion to a major exchange. That means if you already know how to buy stocks, you can acquire BRAG right away. If not, follow the steps below.

Step 1: Pick a brokerage.

Since BRAG stock is now traded on the Nasdaq, any reputable broker will allow you to acquire shares. However, if you’re passionate about IPOs, you should narrow your list of best brokers to platforms that provide pre-IPO access — or the ability to buy new issues at their original offering price — for select enterprises filing to go public.

Step 2: Decide how many shares you want.

Because the newness of IPO stocks makes them unpredictable, you should strive for a balanced share count, one that provides adequate reward potential but also limits your downside if things go awry.

Step 3: Choose your order type.

Before wagering, familiarize yourself with these market concepts.

  • Bid: The buyer’s maximum offer, the bid is always lower than the ask.
  • Ask: The seller’s minimum acceptable price, the ask is always higher than the bid.
  • Spread: The difference between the price bid and the price asked, the spread also indicates market liquidity and risk. Tighter spreads indicate higher liquidity and lower risk due to a stronger demand profile, while wider spreads denote a low-volume market, entailing higher risk.
  • Limit order: A trade request to occur only at a specified price, limit orders provide transparency but no execution guarantees.
  • Market order: Conversely, market orders guarantee fulfillment but only at the prevailing rate, which may fluctuate significantly during order processing.
  • Stop-loss order: A defensive mechanism, a stop-loss order automatically exits your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only execute at a predetermined price, which is the most transparent approach regarding automated exits. However, such orders carry the same non-fulfillment risk as limit orders.

Step 4: Execute your trade.

To execute a market order, follow these steps:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

BRAG Restrictions for Retail Investors

Before betting on new issues, review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons. In summary, anyone with privileged information should avoid profiteering from it.

BRAG Pre-IPO

Recently, ClickIPO and others have begun democratizing the rarefied pre-IPO market by buying blocks of shares of select enterprises seeking to go public for eventual distribution to interested investors.

Wagering on a Hot Hand

Gambling on market assets is never easy, especially when that asset is itself a component of the gambling industry. Part of the hesitancy involves Bragg Gaming’s dependence on outside factors. Nevertheless, VIXIO GamblingCompliance estimates that the U.S. iGaming market could hit $6.4 billion in revenue by 2025, even if only 4 states legalize online gaming. Given such enthusiasm, BRAG stock is difficult to ignore.

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.