In news out this afternoon, MGT Capital Investments (MGT) has signed a deal to sell DraftDay.com for $7M in total consideration which includes $4M cash. MGT will also retain an equity interest in the new venture (including common stock and warrants), with an initial valuation of up to $3.0 million. MGT expects the deal to close in the current quarter.
At time of publication MGT is trading at .44/share with a market cap of $6M. With the $7M planned sale plus retention of up to $3M in the new venture being launched by buyer, Sportech Digital, a subsidiary of SportechPLC, we believe shares are of MGT are currently undervalued.
Disclosure: The publishers of MicrocapResearch.com are long shares of MGT Capital Investments purchased in the open market.