One of the most often cited facts about the esports industry is that it is very much still in its infancy and retains massive potential for future growth. Well one London Stock Exchange listed company, Blue Star Capital PLC (LON:BLU), has given ample evidence of that following its recent update on its esports stock investments.
It’s recent update not only gave details of the performance of its esports portfolio, but also that of its investee companies, The Drops Esports Inc and Diemens Esports PTY Ltd.
Initial Investment of £900,000
Blue Star Capital reported that they had initially invested £900,000 in a total of six esports opportunities back in November 2019, however, since then the company had invested in a total of seven companies across the year and had increased its total investment to £1,680,000.
Those follow-on investments have been made with the likes of Dynasty eSports pte Ltd, Guild Esports PLC, and the most recent being acquiring an interest in FORMATION Esports SaaS.
The company is focusing on investing in a number of key areas linked to esports including esports teams and organisations, payment services, esports technology, and hardware as well as a number of different applications that can be utilised within the media and gaming industries.
Blue Star Capital’s Stock Rises 120%
Back in October when the Guild offered a current valuation of the Blue Star Capital Esports stocks and shares, the portfolio owned by the company was reckoned to have swelled in value to £3,715,890.
That equates to a gain of £2,034,890, which is an increase of approximately 120% on their initial investment.
That large increase is down to a number of key investment areas performing well but in particular, the higher valuation which was achieved by Dynasty eSports in its raising of funds, which was a key driver in this valuation.
Fibresources Drop The Drops
It wasn’t all great news throughout the year though for the company. Back in January, Fibresources Corporation had stated its intention to acquire all of the issued, and any subsequent share capital to be issued from The Drops, another company that Blue Star Capital had invested in to the tune of £147,000 for a 13.6% share in the company.
Fibresource’s acquisition would have led to a healthy return on that investment, but unfortunately, the acquisition was not completed. Had it been then the amount that Blue Star Capital’s investment had increased by would have likely been considerably larger.
Similarly, Diemens announced in February 2020 that it intended to merge with Critical Hit Entertainment PTY Ltd. However, that deal also did not complete after Blue Star had invested £133,000 in Diemens for a 13.3% share of that company.
Other investee companies such as Formation, Googly Esports plc and The Dibs Esports Corp are due to give updates to Blue Star and the company has confirmed that when it receives these updates, it will inform the market shortly thereafter.
Speaking about the report, the CEO of Blue Star, Tony Fabrizi, stated:
“Although today’s news from The Drops and Diemens is disappointing, both companies continue to explore opportunities to build their respective businesses. While the overall performance from our portfolio approach is showing a significant return in year one and while the early-stage nature of our esports portfolio will lead to some disappointments, the Board remains highly optimistic regarding the future performance of the Company’s overall portfolio.”