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Veltyco - fundraise and proposed acquisitions. Hmmm...but BUY

By Steve Moore & Tom Winnifrith | Wednesday 19 April 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Veltyco (VLTY) has announced a €2.55 million subscription for new shares to fund two acquisitions which it argues represent “an exciting opportunity… to grow its business by building on existing online betting brands, using its expertise in online marketing combined with award winning sportsbook technology”

The acquisitions are a proposed €2 million takeover of 51% of Quasar Holdings and €0.51 million for 51% of T4U Marketing, with an option to acquire the remaining 49%.

The former comprises an online platform ('Bet 90') currently being updated to a new SBTech sportsbook and scheduled to go live this summer, with Veltyco stating the move to “build a new business focused on the marketing and expansion of Bet 90's online presence in sportsbook betting, with a particular focus on the Nordic countries and South America”.

T4U Marketing comprises online sports-betting forum sites, and - affiliates for major sportsbook brands, such as Bet365. Veltyco notes “a growing player database” and that it “is expected to be immediately earnings enhancing, and the Bet 90 acquisition is expected to deliver a contribution in the financial year ending 31 December 2018”.

The new shares to fund the moves have gone to “a small number of investors” at 39p per share. This compares to a prior 45p close and represents an 8.3% increase in the company's share capital. Why the hell however were small punters excluded? There is no excuse at all for not using Primary Bid ( which you should all be members of and can sign up at no cost HERE)  to allow that.

We consider this just about acceptable and can only currently wait to see if the acquisitions deliver as the company hopes. However, a cracking February update further enhanced confidence of significant progress this year in any case and although still comfortably ahead of our 35p offer price share tipin January, at around 40p our stance remains buy at 42p or below.

This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tips from Tom & Steve and more from Lucian later this week click HERE

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