Nextplay Technologies Inc (NASDAQ: NXTP) has seen its share price soar by more than 140% after securing a $15m strategic investment into its NextFintech Division from an institutional investor.
The company’s Principal Executive Officer, Nithinan Boonyawattanapisut, commented:
"In spite of the challenging market conditions, we see immediate growth and profitability potential in our NextFintech division, which has been configured to serve overseas markets. Over the next 6 months, we will focus our resources on achieving group profitability via the NextFintech division.”
What is Nextplay Technologies Inc?
NextPlay Technologies is a technology solutions company which provides games, in-game advertising, digital asset products and services, connected TV and travel booking services to consumers and corporations in the United States, Puerto Rico, Europe and Thailand.
The company operates through three segments: Media, FinTech, and Travel.
The Media segment provides HotPlay games studio, a game development studio that develops a range of casual games. It also includes solutions for mobile gaming digital wallets, in game advertising and rewards, gamification, and TV as a Service.
The FinTech segment engages in the development of NextFinTech Platform, an integrated digital financial platform which offers mobile banking, investments into alternative assets and insurance to businesses and individuals.
The Travel segment offers booking solutions for business and leisure, as well as travel technology solutions comprising alternative lodging rental properties under the NextTrip ConNextions brand.
However, NextPlay has entered agreements to sell NextTrip and its 51% ownership of Reinhart Digital TV.
The company was incorporated in 2005 and is based in Sunrise, Florida.
NXTP Stock Financials
Despite the huge jump in price seen today, NXTP stock has fallen in price by 46.67% across the year to date and by 80.49% over the last 12 months. The last year has seen the share price hit a high of $2.97 and a low of $0.17.
The company’s most recent financial results, which covered the three-month period ended 31 May 2022, showed it achieved revenue of $466,551 during the period, compared with nil in the same period 12 months prior.
With operating costs amounting to $4.9m during the period, the company reported a net loss from continuing operations of $4.6m. The business had cash and cash equivalents of $2.4m at 31 May 2021.
NXTP Investment Risks
Nextplay Technologies looks to be running extremely low on cash, making the glaring risk to investing in the business the possibility that it will simply run out of money.
However, the business is selling some of its businesses and of course received an injection of $15m from an institutional source. Furthermore, the company recently signed a loan and security agreement with Savi Capital Partners for a $200m revolving line of credit facility with maturity set for May 31, 2027.
These funds give the business a significant amount of breathing room, but don’t change the fact that it continues to lose money.
It is worth noting that the company has notified the SEC that it will miss the deadline to file its quarterly earnings for the period ended 31 August 2022.
The business stated that this was due to recent business transactions, including a reverse acquisition of the company in June 2021, the expansion of business into new industries and different geographical regions, and the recent agreement to sell its travel and media businesses.
Such a move is understandable given the circumstances, but delays don’t offer encouraging signals to investors.
Is NXTP Stock a Good Investment?
NXTP has secured access to some serious cash since the start of October, giving investors reassurance that it can continue as a going concern for many months to come. Even so, its revenues are still low, and the business appears to have spread itself quite thin in trying to operate across the gaming and fintech spaces.
However, the sale of its travel and TV businesses should streamline operations to some extent.
With its share price standing at $0.48 at the time of writing, NXTP is a penny stock. This means its share price is likely to be subject to significant volatility, placing investors at significant risk.
Some of this volatility has been evident over the past year, with NXTP plunging in price since October 2021.
As such, you should consider your own personal risk appetite before opting to back NXTP stock.
Just one analyst covered by the Wall Street Journal offers a rating of NXTP stock, with this being a Buy rating.
