The Case for Lottery.com Inc. (LTRY)

Early investments in disruptive companies can bring riches to shareholders. But those opportunities don’t come around often … Lottery.com is the exception.

For my long-term investments, I’m focusing on the digitalization of our world. Anything currently based on paper transactions is going to modernize. It’s a matter of when not if.

When a disruptive company changes how people spend money, you should pay attention … especially in a $400 billion industry.

Lottery.com isn’t a pipe dream. It’s a real company with actual revenues.  

  • 2020 revenues were $9 million. 
  • In 2021 it’s on track for $71 million in revenue—year-over-year growth of nearly 700%. 
  • 2023’s projected revenue is $571 million with gross profits of $205 million.
  • By 2025 it could reach $400 million in profits on $1.1 billion in revenue

Monday’s (11/22/21) closing share price of $7 puts the market cap near $350 million.

A conservative price target, five times 2025 earnings, puts the share price at $40+. With a tiny float of only 8.8 million shares, it won’t take much for this stock to start moving.

But that doesn’t account for future expansion.

Lottery.com Expansion Opportunities

Lottery.com’s global market share is tiny. By its own estimates, it controls only 0.02% of the market.

State lotteries won’t let just anyone sell lottery tickets. But Lottery.com already has a foothold. 

It’s in 12 states and has plans to launch in six additional states this year. As the company gains market share, the long-term growth is astronomical…

The global lottery market is worth about $400 billion annually.  For comparison, sports betting is about $85 billion. DraftKings Inc. (DKNG)’s market share is about 25%, and its market cap is $23 billion.

If Lottery.com can capture just 10% of the market share, a comparable market cap puts its share price at $770.

But there’s an obstacle it must overcome first…

The SPAC Pattern

After the merger SPACs have been getting pretty beat up. Take a look at these charts:

VLTA 1-day candles – Chart via thinkorswim
ROVR 1-day candles – Chart via thinkorswim
CCCS 1-day candles – Chart via thinkorswim

They all dip after the merger only to squeeze higher in the weeks that follow.

LTRY’s chart is in this classic dip pattern. I’m more bullish than ever on the stock. I’ve got cash on the side and am waiting to buy more. These dips tend to bottom between $8 and $6 so I’m looking to buy at $7.

From the charts above these dips don’t bounce back quickly. So there should be multiple opportunities to buy once the bottom is established.

Please remember this is my opinion and there are no guarantees. Manage your risk.

Update: 11/24/2021

Since posting my analysis the stock price appears to be bottoming near the $6.50 area. I’ve put 10% of my portfolio into the stock with an average cost of about $8.

Another notable update came from Chardan Capital which initiated coverage of the stock with a buy rating and a price target of $14. That’s more than 100% upside from Wednesday’s closing price of $6.97.

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