3 Companies Thriving During The COVID Pandemic

July 22, 2020 - OilPrice.com


The stock market rally is faltering and investors are now looking for new hot spots to park their money for a lasting COVID bump. 

Three sectors are attracting all the attention...

As investors await new earnings reports and COVID-19 uncertainty rises amid a massive surge in cases in the U.S. without any assurance of more stimulus, all eyes are on EVs and biopharma for the obvious risk-return rewards, but online gambling offers the biggest payout, with potential Netflix-sized growth prospects.  

The Robinhood no-fee trading app has democratized the investing world and unseasoned young traders with a penchant for impact investing have jumped into the digital trading world. They’re hot on EVs in particular, and so far, 10,000 day traders an hour are buying up Tesla, pushing the EV darling’s stock to remarkable new heights. 

On the home entertainment scene, streaming, esports, video gaming and online sports betting are reaching new heights, while sports betting continues to pull in tons of cash during the pandemic. One new entrant, FansUnite Entertainment Inc. (CSE:FANS; OTCMKTS:FUNFF), is hot on the acquisition trail in Canada and now launching a more stealth-like move into the U.S.

The first phase of the wildly explosive online gaming and sports betting industry was all about getting the tech right. The second phase is about bringing it all together. And FansUnite is where it all comes together.  

Meanwhile, the biopharma industry is riding high on its mandate to save the world, with one stock exploding for a company that doesn’t even have any product on the market--and never has. Still, it’s gotten the farthest with COVID vaccine test results, and now its valuation is futuristically ballooning.  

#1 Tesla (NASDAQ:TSLA

There’s absolutely no stopping the ESG momentum right now, and Tesla is the prime beneficiary for a couple of reasons.

COVID-19 should have hit the EV industry hard because of a pandemic lull in driving in Q2--but it didn’t. Instead, EVs have been one of the most visible beneficiaries of the solidified power of impact investing, particularly with regard to climate change. 

Tesla has been tearing it up, with stocks surging threefold year-to-date, and it’s also boosting other EV stocks in the process. Now, not only is Tesla the biggest manufacturer of electric cars and the most valuable car company in the world, but it’s even bigger than American oil supermajor ExxonMobil.

Smashing Wall Street consensus left and right, there seems to be no stopping Tesla, and it’s taking the rest of the industry along for a ride in its wake. 

Everyone can blame Robinhood and call it a bubble waiting to burst if they like. But there is a lesson to be learned from this: Just like BlackRock has taken over Wall Street with its ESG (environmental, social and governance) investing, novice traders are swarming into Robinhood--and they’re after ESG, too. It’s a massive multi-billion-dollar megatrend that no amount of traditional whining is going to stop.

Hydrogen truck maker Nikola (NASDAQ:NKLA) has gone public after a reverse merger with VectoIQ in June, with its stock up more than 60% since. Likewise, Hyliion EV truck company announced its own IPO plans in June, merging with Tortoise Acquisition Corp.

EV maker Fisker plans to go public via a merger with Spartan Energy Acquisition, in a deal that values Fisker at $2.9 billion, and China-based EV startup Lixiang Automotive Inc. filed for IPO last week. 

It’s a space that is filling up so fast that it threatens to leave traditional automakers in the dust. 

#2 FansUnite Entertainment Inc. (CSE:FANS; OTCMKTS:FUNFF)

Welcome to the next multi-billion-dollar industry …

Competitive video gaming and esports were already picking up major momentum before the pandemic, but when traditional sports events were canceled in most countries around the world, esports picked up tens of millions of new viewers instantly. 

Now, global esports industry revenue is set to top $1.05 billion in 2020 and projected to jump another 50% to $1.6 billion by 2023, according to SafeBettingSites.com data. It was already on a tear before COVID, jumping 24% from $776 million in revenue in 2018 to a smashing $957-million-plus in 2019. 

Add online esports betting and online gambling to this mix and you get a market worth $2 trillion--just now being tapped.

One company in a great position is FansUnite (CSE:FANS; OTCMKTS:FUNFF), which launched on the Canadian Securities Exchange on May 5, and through its new acquisition, has two esports-themed casino games under its umbrella--both set to be released this year on multiple casino game aggregators, with more in development. 

Just two months after scooping up UK-based McBookie--a white-label sportsbook that’s been around for over a decade--FansUnite moved to merge with Canadian esports giant Askott Entertainment. The combined entity now has 350 CAD million B2C betting volumes since inception, and over 300,000 registered members. Even better: It gave FansUnite four B2B contracts generating revenue with leading esports companies.

Now, it’s hungry for more M&A. 

The modus operandi? To build a global infrastructure behind the scenes that will seamlessly connect the world’s leading gaming platforms through new, cutting-edge technology. Now it’s eyeing more acquisitions and a stealthy swoop into the U.S. market. 

And where the pre-COVID online gambling environment was a minefield of mistrust--there aren’t many worries here: FansUnite is the new face of online casino transparency and cleanliness. In fact, Scotland-based McBookie already operates under a sub-license granted by the UK Gambling Commission. Its users are able to settle any betting disputes through the IBAS, a U.K.-based third-party independent arbitrator whose rulings are binding on registered operators up to the tune of £10,000. 

FansUnite (CSE:FANS; OTCMKTS:FUNFF) is cleaning house and taking names in the future of online gambling, and it’s stealth moves are against the backdrop of some major user boosts and mega consolidation in this booming industry: 

The eNASCAR Series--the digital version of the most-watched competitive sports event on cable TV this year--now draws over 1.3 million viewers, and four megamergers in the sports betting space have set the tone with the most recent to draw massive attention being the tie-up between DraftKings and SBTech

DraftKings (NASDAQ:DKNG) was a big winner in the merge. Its stock has skyrocketed since the merger, taking its valuation to $12.7B less than two months since the event. That’s already a 346% gain for investors in just a few months and some project it to go even higher. Investors who jumped on this when it went public in April were handsomely rewarded. It’s now valued higher than many casino giants.

What it's banking on is the obvious lesson from the COVID-19 pandemic: esports is an all-weather play, and its legs are quickly turning into wings ... 

#3 Moderna (NASDAQ:MRNA

Biopharma is banking in a big way on a return to normalcy. 

It’s a pandemic, so naturally, biopharma is the biggest beneficiary. After all, the entire world is waiting for this industry to come up with a vaccine that will allow life to get back to normal. That’s a lot of pressure on a single industry--even if the end game is a wildly lucrative one. 

It’s typically a longer game that investors have to play here, but in this case, time is of the essence. 

Every time there’s any tiny glimmer of hope published about ongoing COVID vaccine research and development, the stocks in key biopharma and big pharma companies rally, with some of the key names being Astra Zeneca (NYSE:AZN), Gilead Sciences (NASDAQ:GILD), GlaxSmithKline (NYSE:GSK), Pfizer (NYSE:PFE) and, most recently, Moderna (NASDAQ:MRNA). 

Moderna is perhaps the best example of the moment for how a pandemic can play into a biopharma stock. 

Moderna has never had a product on the market approved by the FDA. And it still doesn’t, but its COVID work is boosting this stock tremendously. Its shares are up nearly 385% since the start of the year.

In fact, it’s valuation has soared so high that it’s now prompted JPMorgan to downgrade it to overweight because this is just a preclinical company with zero products on the market, even though it’s one of the frontrunners to bring us a COVID vaccine. 

So, What Next?

While ESG is taking over and Robinhood is inflating Tesla beyond everyone’s wildest imagination, and while pharma has massive money-making potential with equally massive risk (watch Moderna start producing a vaccine that is still experimental), home entertainment is where money may be safer. And the biggest gains could be set for the online gambling segment.  

COVID is still on the rise, with a line-up of states considering new stay-at-home orders and business still up in the air. Home entertainment is the biggest beneficiary of this, and not only that: Even when COVID eventually subsides or we have a vaccine, no one is likely to give it up. 

Fans Unite (CSE:FANS; OTCMKTS:FUNFF) is now one of Canada’s leading online gaming companies, and its next stop is the United States. It’s a stealth move on an industry that’s already over 10x bigger than the marijuana industry, and once everything’s consolidated, it may well be worth $2 trillion--and counting.  

Canadian companies are diving into these market trends, as well:

Shaw Communications Inc. (NYSE:SJR ) is major player in the Canadian telecoms sector. It owns a ton of infrastructure throughout Canada and its cloud services and open-source projects look to address some of the biggest issues that its customers might face before the customers even face them. As online gaming depends on solid internet connections, Shaw will likely become a backdoor benefactor in increased online activity. Not only that, it’s growing higher on ESG investors’ lists, as well, thanks to its forward-thinking approach to the environment and it’s governance.

Telus Corporation (TSX:T) is Canada’s second largest internet provider, serving over 8 million Canadians from coast to coast. Like Shaw, Telus will be another company to watch as gamers, and the general population, turn to their phones and computers for entertainment. Telus also ranks very highly in the ESG world thanks to its commitment to reducing its carbon footprint and becoming a more sustainable company all around.

Contagious Gaming Inc. (TSXV:CNS) is a software developer that has developed many systems for the e-gaming markets. The company has created a remote sports betting system that allows for live in-play betting during sporting and esporting events. The company’s content and technology can be delivered as a fully integrated service across a single, modern customer platform or can be offered as standalone verticals.

ePlay Digital Inc. (CSE:EPY) creates technology that helps TV networks, esports teams and leagues and even venues cut through the noise to reach their target audience. The company brings together multiple platforms to create engagement across social media, traditional media, streaming, and more. With a team built from sports, esports, and gaming experts, ePlay knows the video game industry inside and out. That’s why they’ve secured partnerships with companies including Time Warner Cable, ESPN, Sony Pictures, AXS TV, Intel, AXN, Fiat, CBS, Cineplex, and others.

Shopify Inc (TSX:SHOP) Along with everything else digital, e-commerce is exploding. And Shopify is at the center if the boom. It’s already got over 1 million businesses using its platform, including Budweiser, Tesla and Red Bull. Not only does it help anyone and everyone who wants to have a try at launching their own business, it gives them the tools and resources to do so.

Even helping so many people realize their dreams, Shopify is pushing towards sustainability in a way many other companies could only imagine. It has started its own sustainability fund, which it adds $5 million to each year to help tackle the climate crisis.

By. Stella Kay

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