Why did Mobile Global Esports (MGAM) stock gained traction today?

By - Rupam Roy

Highlights:

  • The MGAM stock soared about 35 per cent in the morning trading on Tuesday.
  • It announced a technology partnership with Artemis Ave LLC on August 24.
  • Mobile Global Esports had a market cap of nearly US$ 102 million.

The electronic sports or esports platform operator, Mobile Global Esports Inc. (NASDAQ: MGAM), drew the traders' attention on August 30 with its significant gains. The MGAM stock added over 35 per cent on Tuesday morning after soaring over five per cent in the prior session.

However, the main question that may now pop into several investors' minds is why the stock has noted the significant advancement today. Let's find out!

What could be the reason for MGAM's recent surge?

Although there is no news or release from the mobile gaming firm today that could have driven its recent rally, it is expected that its operating model and the growing popularity of esports have attracted investors' attention towards it.

The last notable news from the company was a partnership announcement with Artemis Ave LLC. According to the announcement, Artemis Ave LLC partnered with Mobile Global Esports on August 24, which is expected to provide more active engagement for the India-based university esports segments.

This new platform, through the partnership, aimed to introduce ZuCasa's video "Casas", which would allow the players or users to interact with high-definition video and audio in digital rooms while playing games. In addition, it would also allow them to watch esports tournaments, even on YouTube.

The MGAM stock debuted in the public market through its Nasdaq listing on July 29 this year. It offered 1.5 million shares for US$ 4 apiece.

On the second trading day, the investors gathered around the stock, pushing its stock to as much as US$ 20. Meanwhile, after that significant jump, it again fell to about US$ 2 per share on August 29.

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Bottom line

The MGAM stock rose 35 per cent to US$ 3.51 at 10:43 am ET on August 30, after closing at US$ 2.60 in the previous session. Mobile Global's trading volume was 35.90 million at the time of writing.

Talking about its financials, no revenue was recorded in the March quarter of the year. Its net loss was US$ 91,482 for the quarter that ended on March 31, 2022, while no income or loss was recorded in the preceding year's same period.

Since its public debut, the stock of the US$ 101.98 million market cap firm saw the highest price of US$ 20.74, noted on August 1, 2022, and the lowest price of US$ 2.26, recorded on August 29, 2022.