NextPlay Technologies, Inc. (NASDAQ: NXTP) is a tech solutions company working across a range of branches such as games, in-game advertising, crypto-banking, and travel booking services using AI and blockchain. It seems that some esports and tech stocks are seeing increased interest after Facebook’s Metaverse update. But in the short term NXTP offers a potential technical play after bottoming out thanks to its direct offering announcement. The stock fell around 53% on the news putting the PPS at $1.37 currently.

Catalysts

NXTP made the news on November 1st, when it announced a direct offering which would allow the company to purchase roughly $30 million of its common stock and warrants from institutional investors. Under the agreement, NXTP will sell around 18.98 million shares of its common stock and warrants in order to purchase around 14.24 million shares of common stock from these institutions.

Despite the sell off, NXTP is one of the best tech stocks to watch because of the company’s strong fundamentals. NXTP has been expanding recently, having acquired the TV company Zappware and the digital bank IFEB which was rebranded as NextBank International, Inc. These acquisitions tie into NXTP’s HotPlay platform which creates a monetization platform from video games through targeted in-game advertising. This means avatar skins or background features of video games could include company brands or advertisements.

The company is also entering the FinTech sphere through its NextBank and Longroot companies. Longroot is an Initial Coin Offering (ICO) portal and NXTP plans to use these assets to create regulated cryptocurrencies which would be used for investment in wholesale travel, real estate, gaming assets, and digital advertising.

Financially NXTP is also doing well and saw a boost in its stock following its last earnings report. In Q2 NXTP had a revenue of $2.6 million and gross profits of $1.4 million. Its recent acquisitions have put the company’s total assets at $103.8 million but because the acquisitions were completed mid-quarter, their full revenue stream were not reflected in the report.

With these fundamentals in mind, investors are expecting to see a bounce today with the close of NXTP’s offering.

Media Sentiment

Let’s see if @milly101 will turn these pennies into gold with NXTP’s expected reversal

Technical Analysis

tech stocks NXTP chart

NXTP is currently trading at $1.37 following the drop, putting its new support at 1.34 and its resistance at 1.97. With the offering’s close the stock is expected to run, returning to its previous PPS near 1.97 but could even hit its second resistance near 2.20. The RSI is currently at 36 as it rebalance from earlier overselling and the MACD is trending upwards following a bullish crossover. Accumulation is currently low.

Should You Buy

Getting in before the expected bounce could yield significant profits for investors as the stock returns to its typical price of $1.97 – a $.60 gain per share. However, long term investment in NXTP could pay off as it often does with tech stocks. Especially if the company continues to make progress in the FinTech sphere while pursuing the lucrative industry of in-game advertising. The $30 million from the offering is for paying off some of the company’s debts which is also a sign of the company’s strong fundamentals.

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