EDBL Could Be The Next MSGM

We have seen Motorsport Games Inc. (MSGM) go absolutely insane, running from $2.63 to $37.00 over the past two days. Other egaming, gambling and similar type of stocks like Mobile Global Esports Inc. (MGAM), EBET, Inc. (EBET) and SharpLink Gaming Ltd. (SBET) saw sharp increases in the morning as sympathy plays, but did pull back significantly in the afternoon. That's because they don't really make great sympathy plays. They all have floats above 10 million with total share counts in the 20 million range. MSGM has only a 460,000 float and 1.2 million shares outstanding.

The best comparable for a sympathy play we can find is Edible Garden AG Incorporated (EDBL). It has an outstandingly low shares outstanding of 342,000 and float of only 162,000 after a reverse split a week ago. The chart below summarizes the opportunity on the stock:







Not only does it have a much smaller float, it also has comparable revenue to these other companies despite the cheaper valuation. Its revenue multiple of 0.4 is several times lower than every other stock except EBET. This is why we think it can run like MSGM. It has to move up about 800% just to come in-line with MSGM's valuation. 

Technically, these stocks also have a lot in common, with EDBL showing particular strength. MGSM reverse split its stock on November 9th. Most stock splits are met with immediate tanks, but MGSM was actually stronger for the next couple of days. It did eventually sink down, hitting the low $2's in December, but that was a particularly bad time for the small cap market and tax loss selling. 

Since its reverse split on January 26th, EDBL has remained strong. It has increased from $10.50 to $11.70 since, and it's up over 50% from where it was two weeks ago. This is unusually bullish activity leading into and immediately following a reverse split. 

The resulting price action has clearly formed a bottom on EDBL and it's in the beginning stages of a cup and handle formation, much like what was forming on MGSM before it finally exploded:








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