EDITOR: | April 14th, 2015 | 4 Comments

Contagious Gaming: Already in Play?

| April 14, 2015 | 4 Comments
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Contagious-Gaming-Examples-2Quick update on yesterday’s article on Contagious Gaming (TSXV:CNS) titled Wanna Bet? Contagious Gaming Builds Tech for Fun and Profit:

We looked at the massive online gaming industry and Contagious’ plan of attack. There is a possibility that Contagious, a fairly new public company, is following the route set by Amaya Inc. and is already on the acquisition trail.

Here’s the reason for my suspicion. It begins with an error in yesterday’s article. I wrote, “A football match is 90 minutes long. GoalTime divides the game into 15 segments of 5 minutes each.” For a guy with a computer science degree, I sure did a lousy job on my math. Dividing a game of 90 minutes into 5 minute segments would result in 18 segments, not 15. Knucklehead.

So yesterday I began emailing various company representatives to correct my mistake and get a better understanding of exactly how GoalTime works. To date, no one from the company, except for an outside shareholder, has gotten back to me.

Not a word from the management team. Not a word from a director. Not even a “Gee, we’re busy we’ll get back to you.” No email, no phone call, no text.

Either no one on the management team cares enough to respond, or something is going on that blacks all of them out from talking to me or to anyone.

If you look at Amaya’s track record, its incredible growth was driven by M&A activity. With a public treasury, Contagious could be following the same route.

Add this to the rumours around Intertainment Media Inc. (TSXV:INT), whose tag line is “We help brands engage by developing, nurturing, and investing in new technologies”. The market commentary is that Intertainment might have run up against a wall – it will be unable to effectively grow larger as a stand-alone company and requires other revenue streams for growth. Layering Contagious’ new technology with Intertainment’s services could be win-win.

Regardless of what happens with Intertainment, if anything, I’m guessing Contagious’ management is going to emerge from blackout in the next few days with news.


Peter Clausi

Editor:

Mr. Clausi is an experienced investment banker, executive and director. A graduate of Osgoode Hall Law School called to Ontario's bar in 1990, Mr. Clausi ... <Read more about Peter Clausi>


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Comments

  • Clausi updates us on his Financings, Takeovers and Confusion | InvestorIntel

    […] Contagious Gaming (TSXV:CNS) from April 13 and 14, 2015. Still no word re M&A activity from this developer and manager of online gaming. I’m not concerned as M&A activity has its own timetable and can’t be rushed. I’ll be concerned if a few more weeks go by and we still haven’t heard anything. Looking forward to the first quarter of financials and MD&A after the go-public transaction so we can get a clearer look at the costs structure. […]

    April 30, 2015 - 11:37 AM

  • Bill C.

    New Analyst Coverage out on CNS by Beacon Securities Toronto.

    Initiating Coverage: Sports, Gambling & Mobile – A Match Made in Investor Heaven

    – they also mention DraftTeam Daily Fantasy Sports Corp & Sprylogics International Corp.

    …..A little over a year ago, we were the first firm initiating coverage of theScore Inc. (SCR-V). The company’s share price subsequently tripled. Today, we identify three more public companies which we believe have the potential to prosper in the lucrative and fast-growing “sports-betting-mobile complex”. Specifically, we are initiating coverage of:

    • Contagious Gaming Inc. (CNS-V) – Buy – $0.75 target price

    o Contagious operates Goal Time, a pari-mutuel lottery-style betting platform for European soccer. With a unique product, which we feel should attract a casual gambler, and some significant partnerships, we believe it can quickly stake out a position in this industry. We look to the release of a mobile app just prior to the start of the next English Premier League (EPL) season in August 2015, and a large marketing push to accelerate user adoption of Goal Time.
    o The company also develops eInstant games (the online equivalent of printed instant scratch and win cards). Again, being partnered with the two major suppliers to U.S. state lotteries, and positive early data from Georgia, the first state to roll out such an offering, we believe Contagious is well positioned to benefit from a secular trend of state lotteries offering eInstant products to try and attract younger players.
    o While not expected to be a major growth area, Contagious also operates a software development business, which provides a steady stream of cash flow today to help fund the growth in the two other business lines noted above………………….

    May 1, 2015 - 1:22 PM

  • Sy

    Interesting article.

    I was curious though, of all the companies out there, what made you think of Intertainment Media?

    May 1, 2015 - 1:54 PM

  • Peter Clausi

    I did some work with Intertainment a few years ago, when it was still trying to figure out its place in the market. With market developments I’m not as familiar with the company as I once was. The rumour mill, which is half right half the time, says that the company is running into revenue-growth challenges that can only be solved by growing in scale. That kind of growth usually lateral as well as vertical growth, and that is best achieved through M&A activities.

    May 1, 2015 - 1:59 PM

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