This Behind the Scenes Company Could Provide a Gain of More Than 250%
Eventbrite (NYSE: EB), a global ticketing and event technology platform that powers millions of events, today announced its expansion into Asia with the launch of its first localized platform in the Asian market.
The launch in Singapore is the company’s first foray into Asia’s booming events market and follows sizeable organic growth and adoption of Eventbrite in the Asia Pacific region. The localized platform at eventbrite.sg will empower Singaporean event creators with innovative solutions to help them create experiences and sell even more tickets – including curated local content, seamless native checkout and payment processing in Singapore Dollars (SGD).
To date, Eventbrite has experienced strong growth in Singapore, powering more than 90,000 events in the country since the platform’s inception. The success of the platform in-market points to:
- A rich and growing events industry: More than 4.9 million tickets have been transacted on Eventbrite in Singapore since the platform’s inception.
- A deeply passionate community of event creators: With over 17,000 Singaporean event creators already using the Eventbrite platform, it appears that that locals love hosting live experiences.
- A country of diverse tastes: Eventbrite has seen strong organic growth in community, education, and food and wine events in Singapore, with events such as the Pinot Paloozapinot noir festival, Saturday Kids’ children’s education workshops and performances at The Singapore American School.
- Eventbrite’s opportunity in Singapore is fuelled by the nation’s growing appetite for live experiences. Research released today conducted by Roy Morgan in conjunction with Eventbrite shows that 95% of Singaporeans attended an event in the past 12 months; with almost half (44%) of those surveyed stating they intend to increase the number of events they attend in the next year.
- This research into Singapore’s growing experience economy also found:
- On average, Singaporeans reported that they spent a total of S$429 on live experiences from November 2017 to November 2018, while 13% of those surveyed reported that they spent more than S$1000 in that same period.
- The majority of Singaporeans (79%) would rather spend their money on an experience versus a tangible item.
- Close to two-thirds of Singaporean millennials (aged 18-34) attend live events to have something to share on social media (57%).
- Mature Singaporeans are seeking new skills: 59% of those aged 45+ attended an education class or workshop in the past year.
Phil Silverstone, General Manager, Asia Pacific, said Eventbrite’s launch into Asia comes at a time of immense opportunity.
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“Singapore is a nation where live experiences are deeply woven into the cultural fabric. From its dynamic arts festivals to its world-famous food scene, there’s always something new and exciting to do in the Lion City; and it’s a market we view as strategic to Eventbrite’s long-term success in the Asia Pacific region,” he said.
“We’ve been closely tracking the events market in Singapore and are excited about the quality and breadth of events taking place. Following strong organic growth of our platform in-market, we’re pleased to deliver a localized offering that will help Singaporean event creators be even more successful and look forward to deepening our understanding of the local market to best serve their needs now, and into the future.”
This news seems to have pushed the stock out of its narrow trading range.
The trading range can be seen on the longer-term chart and the breakout could lead to a push towards the old highs.
A Trade for Short Term Bulls
As with the ownership of any stock, buying EB could require a significant amount of capital and exposes the investor to standard risks of owning a stock.
To reduce the risks of a trade, an investor could purchase a call option. This allows them to benefit from upside moves in the stock while limiting risk to the amount paid for the options. However, buying a call option can also require a significant amount of capital and includes the risk of a 100% loss.
Whenever an option is bought, the maximum risk is always equal to 100% of the amount of spent to purchase the option. Since options cost significantly less than a stock, the risk in dollar terms will usually be relatively small to own an option.
To further limit the risks of the trade, an investor could use a bull call spread. This strategy consists of buying one call option and selling another at a higher strike price to help pay for the cost of buying the first call. The spread strategy always reduces the risk of an options trade.
This strategy is designed to profit from a gain in the underlying stock’s price but has the benefit of avoiding the large up-front capital outlay and downside risk of outright stock ownership. The potential risks and rewards of this strategy are summarized in the chart below.
Source: The Options Industry Council
Both the potential profit and loss for the bull call spread are limited. The maximum loss is equal to the net premium paid when the trade is opened. The maximum profit is limited to the difference between the strike prices, less the debit paid to put on the position.
This strategy could be especially appealing with high priced stocks where the share price and options premiums are often a significant commitment of capital for smaller investors.
A Specific Trade for EB
Every day, we scan the markets looking for trades that EB low risk and high potential rewards. These trades are available almost every day and we share them with you as we find them. Now, it’s important to remember these are trading opportunities in volatile stocks.
When we find a potential opportunity, we evaluate it with real market data. But because the trades are volatile, the opportunities may differ by the time you read this. To help you evaluate the current opportunity, we show our math and explain the strategy.
For EB, the April 18 options allow a trader to gain exposure to the stock.
An April 18 $35 call option can be bought for about $1.45 and the April 18 $40 call could be sold for about $0.40. This trade would cost $1.05 to open, or $105 since each contract covers 100 shares of stock.
The amount paid to enter the trade is the largest possible loss on the trade. This is generally true whenever a trader is creating a debit to enter an options trade. “Creating a debit” means there is a cost to enter the trade. You could create a debit by simply buying puts or calls to open a directional trade.
In this trade, the maximum loss would be equal to the amount spent to open the trade, or $105.
The maximum gain on the trade is equal to the difference in exercise prices less the amount of the premium paid to open the trade.
For this trade in EB the maximum gain is $3.95 ($40 – $35 = $5; $5 – $1.05 = $3.95). This represents $395 per contract since each contract covers 100 shares.
Most brokers will require minimum trading capital equal to the risk on the trade, or $105 to open this trade.
That is a potential gain of about 276% based on the amount risked in the trade. The trade could be closed early if the maximum gain is realized before the options expire.