Social Capital Hedosophia Holdings Corp. V

Social Capital Hedosophia Holdings Corp. V (NYSE: IPOE) is a special purpose acquisition company aiming to bring consumer-focused financial technology businesses to the public markets.

Investment Highlights - Social Capital Hedosophia Holdings Corp. V – Avoid at USD 20.16

• The Company did not have any operations, and hence no revenues were reported.
• From a technical standpoint, the Company is trading at 14-day RSI of ~87.12, indicating a further downside potential in the stock.

Key Risks

• The Company has not reported any financial data yet.
• The Company is exposed to compliance risk.

Recent Developments

On 11 January 2021, the Company had entered into an agreement with SoFi Investor to bring SoFi into public markets.         

Share Price Chart (from 30 November 2020 to 15 January 2021)

 (Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company had begun trading on 30 November 2020. On the technical front, the Company is trading at a 14-day RSI of 87.12, indicating a downside potential in the stock price. The stock made a 52-week low and high of USD 10.10 and USD 22.00, respectively.

Based on the lack of financial information available, we have given an "Avoid" stance on Social Capital Hedosophia Holdings Corp. V at the closing market price of USD 20.16 (as on 15 January 2021).

Super League Gaming Inc

Super League Gaming Inc (NASDAQ: SLGG) is a California, United States-based Company, which operates as a gaming community and platform. SLGG launched gaming broadcastings services through Virtualis Studios. The cloud-based platform remotely captures player cam feeds and live stream gameplay.

Rationale for Valuation – Super League Gaming Inc - Avoid at USD 3.13

• The Company’s Price/Earnings and EV/EBITDA multiples are in negative zone as compared to the Software & IT services industry multiple, reflecting negative valuations.
• The Company's net margin and Return on equity were in the negative zone from the last four periods.
• The operating landscape remains highly volatile with the continuing uncertainty due to Covid-19 pandemic.
• From the technical standpoint, 14-day RSI stood at ~57, which means the stock price could decline in the short term.

Key Risks

• The Group’s liquidity may be impacted because of the ongoing circumstances related to COVID-19 pandemic.
• The requirement to keep adequate regulatory capital may reduce profitability.
• There are financial risks associated with fluctuations in foreign exchange rates, commodity prices, equity, and index prices.

Recent News

On 14 January 2021, the Company stated that it witnessed incredible success in pandemic-challenged 2020, with huge growth in 2020 (particularly in audience engagement). Further, it launched Virtualis Studios.

On 12 January 2021, it announced the exciting success of the Winter Wonderland (most recent youth-focused initiative).

Q3 FY20 Trading Update (for the third quarter ended 30 September 2020, as on 11 November 2020)

• In Q3 FY20, the revenues increased by 105% year-on-year to USD 718,000, with a significant increase in advertising and content sales revenues.
• On a GAAP-basis, net loss for Q3 FY20 stood at USD 4.3 million, which was marginally improved from the comparable prior-year quarter.
• On 30 September 2020, the cash position increased to USD 10.3 million against the USD 8.4 million at 31 December 2020, with the continued expansion of strategic partnerships.

One Year Share Price Chart

 (Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company witnessed the strongest quarterly revenues, with expanding the breadth of the partnerships. Looking forward, it expects to ramp up the investment and will be expanding the worldwide sales and marketing activities. SLGG’s operations were not materially impacted by the covid-19 pandemic, while the market remained highly uncertain. Moreover, the Company works in a challenging environment that requires continuous investment, sometimes at the profitability cost, to stay ahead of competitors. Overall, the Company is still in the development stage. The stock made a 52-week low and high of USD 1.30 and USD 6.50, respectively.

Based on the headwinds faced by the Company, we have given an “Avoid” recommendation on Super League Gaming, Inc. at the closing price of USD 3.13 (as on 15 January 2021), and we will watch for results of new investments.

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