Alliance MMA Inc. (NASDAQ:AMMA) Acquires Victory Fighting Championship

Alliance MMA Inc. (NASDAQ:AMMA)

Alliance MMA Inc. (NASDAQ:AMMA)

Shares of Alliance MMA Inc. (NASDAQ:AMMA) gained 87.5% after the mixed martial arts company announced the acquisition of Victory Fighting Championship. The acquisition follows a strong second quarter in which the company reported a 48% increase in revenues.

Alliance MMA Inc. (NASDAQ:AMMA) is currently trading in an uptrend after reaching a key support level at $1.80. However, it is still down by more than 30% for the year after dropping from the $4 a share mark.

Alliance MMA Inc. (NASDAQ:AMMA)

Acquisition

The VFC acquisition is an aggressive move as the company has produced more than 60 live MMA events since 2002. A global distribution network has broadcasted its events in over 155 countries. The acquisition should thus allow Alliance MMA Inc. (NASDAQ:AMMA) to achieve multiple strategic goals.

“VFC’s organizational footprint, in terms of scale and distribution on UFC FIGHT PASS, provides an incredible opportunity for Alliance MMA to produce content – including live content – that fans want to see,” said CEO, Paul Danner.

Alliance MMA Inc. (NASDAQ:AMMA) should be able to expand its footprint and operations into more geographies with the acquisition. According to Mr. Danner, plans are underway to launch in several new cities by leveraging VFC’s unique brand of entertainment. The company already operates in 13 of the top 30 Nielsen Designated Market Areas.

The mixed martial arts company is on course to host eight events this month as it closes in on its goal of hosting at least 125 MMA events per year. This month’s lineup features numerous title bouts in top markets including cities in Midwest, Northeast South, and West.

Push For Positive Cash Flow

Alliance MMA Inc. (NASDAQ:AMMA) should be able to build on its second quarter earnings momentum given the roster of events in the pipeline. The company is on track to achieve a positive cash flow thanks to a 48% increase in Q2 revenues.

Solid execution of the electronic platform CagTix.com and a strong performance by the fighter management firm, SuckerPunch Entertainment, led to a 14% increase in operating margin. During the quarter, the company raised approximately $1.5 million. Alliance MMA Inc. (NASDAQ:AMMA) plans to use the amount to finance acquisitions, needed to further grow the brand.

“Our strong second quarter operating results reflect impressive gains in each of the most important key performance indicators for an enterprise at our stage of development,” said Mr. Danner.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Author: James Marion

James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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