Posted: July 29, 2022, 4:21 AM.
Last updated: July 29, 2022, 4:55 AM.
On a strong day for the broader market, Lottery.com (NASDAQ:LTRY) lost nearly two-thirds of its value. That’s after the gaming company revealed in a registration application that it doesn’t have enough capital to survive a year.
Mega Millions tickets. That jackpot is rising, but Lottery.com is about to collapse. (Image: CNN)
Shares of the internet lottery provider fell 63.79% today on a volume about 40 times above the daily average. The slump on Friday extends the stock’s decline so far to 87.21%. AutoLotto, which does business as Lottery.com, debuted last November as a standalone publicly traded company. That follows a merger with the Special Purpose Acquisition Company (SPAC) Trident Acquisitions Corp.
Prior to its debut as a publicly traded company, Lottery.com predicted a post-trade enterprise value of $526 million, with $45 million in cash. The market cap is $41.53 million after today’s shellacking. As described in a Form 8-K filing with the Securities and Exchange Commission (SEC), the gambling company is in a precarious financial situation and is laying off staff to save money.
On July 28, 2022, the Board of Directors of Lottery.com Inc. (the “Company”) determined that the Company does not currently have sufficient financial resources to fund its operations or pay certain existing obligations, including its payroll and related obligations . Accordingly, the company plans to lay off certain employees effective July 29, 2022,” the filing said.
Lottery.com acknowledges that these staffers owe $425,000 in back wages and that if the company cannot compensate those employees, they can take legal action against the company.
Lottery.com Could Be Doubtful SPAC Collapse
Lottery.com’s merger with Trident was announced at the height of SPAC fever. That was ahead of a series of significant cuts to blank check stocks with merger partners across multiple industries, not just gaming.
There was enthusiasm for the stock as it rose to $17.50 last November amid a bullish revenue forecast. At the time, the company touted low customer acquisition costs and state-level expansion plans.
“From 2016 to 2020, Lottery.com grew gross sales at a compound annual growth rate of 322%, forecasting gross sales to equal approximately $71 million in 2021, $280 million in 2022 and $571 million in 2023,” the company said. .
In other words, it shouldn’t have been. But the reality for Lottery.com is that a stock that traded at $17.50 less than 10 months ago closed at 29 cents today, and its chances of survival seem questionable.
“In addition, the Company’s capital resources are not sufficient to fund its operations for a period of twelve months, and therefore there is substantial doubt about the Company’s ability to continue as a going concern. If the company is unable to raise additional capital or otherwise finance its operations, the company will be forced to wind down some or all of its operations and pursue options to purchase the company’s assets, including equipment and intellectual property,” said the 8-K.
This should be a heyday for companies operating in the lottery industry, including internet companies that provide convenience to customers.
On that note, it may be a cruel twist of fate that Lottery.com’s 8-K filing arrives on the day of a $1.28 billion Mega Millions draw — one of the biggest jackpots in history. the American lottery.
Even after taxes, the winner of that pot can buy Lottery.com multiple times.
This post Lottery.com may not have money to survive 12 months
was original published at “https://www.casino.org/news/lottery-com-may-not-have-cash-to-survive-12-months/”