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XLMedia - Significant asset disposal for US$42.5m

April 2024

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • XLM
  • Price:
  • 12.5p
XLMedia’s shares shot ahead by 99% in one day after it sold its Europe and Canada sports and gaming assets including Freebets.com, PonturiBune, WhichBingo and Kasinot.com, to Gambling.com for a total US$42.5m (US$37.5m fixed, US$5m earnout). Considering it had a market cap of £16m before the news emerged, this demonstrates just how badly the market is valuing small caps at present. The proceeds will be used to settle deferred payments on past acquisitions (US$4m), tax (US$5m) and provide capital for the US business and then to return significant sums to shareholders.  Following the completion of the deal, net cash is c.US$35m (£27m) or 10p a share, leaving the US business in for free. Await developments. ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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