Why the Emerge Gaming (ASX:EM1) share price is up 12%

Its been a rollercoaster ride for the Emerge Gaming Ltd (ASX: EM1) share price. Here’s why its shares are pushing higher on Wednesday.

| More on:
Five stacked building blocks with green arrows, indicating rising inflation or share prices

Image source: Getty Images

The Emerge Gaming Ltd (ASX: EM1) share price jumped 12% higher on Tuesday to 3.7 cents. This comes after the company provided a subscription update for its MTN Arena Platform. At the time of writing, the Emerge Gaming share price has retreated slightly to 3.6 cents. However, it is still up 9%.

Emerge Gaming share price surges on subscription update 

Emerge Gaming has been growing its user base in South Africa. This comes after its two-year agreement with the country’s largest telco Mobile Telephone Networks (MTN) back in late 2019.

On Wednesday, the company announced that ~225,000 paying subscribers had registered on the platform. Additionally, the company had ~105,000 new subscribers registering in the past two months. 

MTN Arena generates revenues by billing a daily subscription fee against mobile subscriber accounts. Users pay a fee of approximately 26 cents a day ($7.80 per month). This fee allows them to enter into competitions involving their favourite mobile social games. Furthermore, subscribers are able to earn rewards and also win cash prizes. Under the agreement, MTN has committed to paying approximately ~A$8,900 per month for monthly prizes. This amount will be dedicated for the first 12 months of the platform’s operation. 

Additionally, the company continues to invest in marketing campaigns to drive user adoption and registration to the MTN Arena Platform. The Platform is promoted across multiple digital channels and bulk SMSs to target MTN’s 29 million subscribers in South Africa. 

A rollercoaster ride for shareholders 

The Emerge Gaming share price managed to go full circle from around 4.5 cents to as high as 17 cents and back to 4.5 cents between October 2020 and February 2021. 

Its shares surged in October after the company announced that it had received more than 3 million pre-registrations for its MIGGSTER Mobile platform. MIGGSTER is a similar concept as MTN, allowing paying users to enter tournaments and win prizes. 

Its shares came under fire after an ASX query that resulted in the company announcing that there were only 25,674 subscriptions on the MIGGSTER platform. 

While the company has come clean with definitions and revenue, its shares are unlikely to re-test its previous all-time record highs of 17 cents any time soon. 


Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News