Gfinity shares are making a comeback after collapsing amid a slowing esports industry and a shift in the advertising landscape.
After losing 99% of their value from all-time highs to lows of 0.015p, Gfinity shares are making something of a comeback.
Gfinity’s problems were twofold: first, the company’s initial focus on esports couldn’t generate profit, and overall esports popularity was waning. Second, Gfinity’s media business suffered as Google algorithms changed and impacted the amount of traffic its portals received.
If they had maintained high traffic levels, the decision to move away from esports and focus on media might have proved successful, with the company able to deliver future profit growth with simple cost-cutting.
Nonetheless, Gfinity is reinventing itself again and capturing investors’ attention.
Investors will be delighted that the company announced it is on track to meet its target of monthly profitability by the end of 2024, but the really exciting part of the recent announcement is the company’s plans to diversify into video advertising.
The focus on gaming wore thin after the pandemic as gamers returned to the office and spent more time socialising with actual people instead of glued to their computer screens. The company highlighted changes in algorithms for falling user numbers, but in reality, a combination of factors dented revenue for the media business.
Gfiinity has now set its targets on the broad digital medium of video and freed itself from the shackles of struggling to carve out profits from gaming.
Gfinity’s plans are interesting because it is now targeting operations in a digital format with billions of users with a multitude of interests, which will allow Gfinity to focus on the underlying technology and not have to worry too much about consumer behavioural trends.
The company’s realignment towards video is driven by Gfinity’s largest shareholder, Robert Keith, and a related party transaction between Gfinity and 0M Technology Solutions Ltd, a company Robert Keith is the owner of.
Gfinity has signed a non-binding Memorandum of Understanding (MOU) with 0M Technology Solutions Ltd to commercialise its artificial intelligence technology for the connected video market.
Under the proposed terms, Gfinity will receive an exclusive license to use 0M’s Connected IQ (CIQ) technology, with 0M receiving a royalty fee of 30% of net profits generated from the license.
The deal would give Gfinity a new lease of life, and with shares priced for complete failure, investors are taking note.