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Wednesday, August 20, 2014

The Worst Call of My Career

  • MGT reported second quarter earnings that showed substantial improvement over 2013.
  • I fear it may be too little too late as the company's share price has shaved over 2/3 off its value since I recommended it.
  • The company failed to execute on its plans that caused me to opine on the stock last year.
  • The stock would need to triple to be back to where I made the call.
  • I own up to the fact that this is the worst buy call of my career.

  • After a rough run into 2014, MGT Technology (NYSEMKT:MGT) just reported its second quarter earnings. It was an interesting quarter that saw the acquisition of draftday.com, the launch of mgtplay.com, tweaks to the vegasinsider.com fantasy sports platform and a launch of a fantasy news site called fantasysportslive.com. Now how did the company do earnings wise? Well, revenues were up nearly five-fold year-over-year, coming in at $320,000 in its second quarter compared to $67,000 in its comparable 2013 quarter. Gross margin was up to $153,000 (up from $47,000 last year) while at the same time operating expenses came down a whopping 47% year-over-year to $1.7 million. Obviously the company is still losing cash with these numbers, and operating loss was about $1.5 million. This is half of the 2013 losses in the second quarter of $3.1 million. So things are moving in a better direction for the company. So now................READ MORE

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