HC Andersen Capital has published new investment research. I opened a dedicated company page for it, and the research can also be found on the inderes.fi service.
Company page: Astralis Group - osake - Inderes
Research: https://www.inderes.fi/fi/astralis-investment-case-12-may-2022-hc-andersen-capital
LoL (League of Legends) Esport’s Astralis has pretty much thrown in the towel and will play the upcoming summer season with a “budget” team. The team lost its only good player and kicked a couple of weaker performers; they were replaced by players whose best years are already behind them. It seems very clear that the goal is to sell that league spot and hang on by a thread until then. A challenge could be that the league has the right to kick a team out (and force it to sell its spot) if the team doesn’t make the playoffs for four seasons in a row. In the eyes of viewers, Astralis is starting to look like a joke organization.
If the league spot could be sold (Karmine Corp and KOI have both stated their goal is to get into LEC, and there are certainly other teams), Astralis’s EV at current values would be negative, but I’m a bit skeptical whether the company would make decisions after the sale that would be in the best interest of shareholders. There would certainly be buyers for the spot, but the price will be a question mark.
Things have been happening again over the summer.
In LEC (League of Legends European Championship), team Misfits is selling an 80% stake in its spot to Team Heretics. The sale price has not been disclosed, but rumors speak of a $34-36 million deal (for 80%), while other sources estimate the LEC spot’s value in the deal to be $40-50 million. https://www.theloadout.com/league-of-legends/lec-heretics-acquires-misfits-spot
LEC team Rogue is very likely selling a portion of its LEC spot to the KOI organization. Estimates for the transaction amount have ranged between $20-25 million for about a 40-50% ownership stake. https://blix.gg/news/koi-close-to-reaching-an-agreement-to-join-lec-with-rogue
In recent days, news about Astralis potentially selling its LEC spot has resurfaced. https://upcomer.com/sources-astralis-considering-offers-for-their-lec-spot
Apparently, Karmine Corp’s management has been negotiating with Astralis in Copenhagen this week. If anyone knows French and can watch/listen to interviews, there should be a lot more information here: Twitch
Today, an announcement I’ve been waiting for a long time finally arrived. (Management is exploring alternative ways to address the undervaluation)
https://www.inderes.fi/fi/tiedotteet/company-announcement-4-2023-strategic-review
A couple of days ago, rumors surfaced that TSM, one of the world’s most valuable esports brands, might be divesting all of its esports operations. Last night, reliable but unconfirmed news broke that CLG, another long-standing esports organization, was sold quickly to NRG over the past few days. It’s not quite clear whether just the League of Legends division or the entire organization was involved. Bearish: companies want to sell. Bullish: there appear to be buyers.
So NRG bought CLG’s LoL division from the publicly listed Madison Square Garden (and the rest of CLG was shut down). We will likely get more information on the valuation from MSG’s upcoming quarterly/annual report.
It finally happened. A €26m valuation for a slot from which Astralis is expected to receive about €15m in cash flow after taxes over the next 3 years. Astralis still retains 33% ownership, but the buyer has the option to buy out that portion as well by 2031. Astralis’s market cap today? €5m..Astralis Sells a Majority Stake in its League of Legends European Championship Franchise Slot
Market value might not be worth looking at too closely, given this upcoming event:
Astralis A/S will delist from Nasdaq First North Growth Market Denmark
The last day of trading of the shares in Astralis A/S on Nasdaq First North Growth Market Denmark will be Wednesday 25 October 2023.
Yeah, it has crashed the share price. But the shares don’t just disappear; they just can’t be traded on the exchange. You’d think that even the major shareholders would like to take money out of the company at some point, perhaps in the form of dividends, even if some of it surely goes into CS investments.