Blue Star Capital Shares Jump 8% on unrealised portfolio gains of £2.0m

Blue Star Capital plc (BLU), has announced an update in respect of its esports investee companies, The Drops Esports Inc ("The Drops") and Diemens Esports PTY Ltd ("Diemens") and an update on overall portfolio performance and valuation.

The Drops

Further to the announcement of 14 January 2020, in which it was announced that The Drops had entered into a letter of intent with Fibresources Corporation ("Fibresources"), whereby Fibresources stated its intention to acquire all of the issued, and to be issued, share capital of The Drops. The Company has been informed that Fibresources did not complete the acquisition. Blue Star has invested approximately £147,000 in The Drops and holds an interest of 13.6 per cent. in the company.

Diemens

As per the announcement of 3 February 2020, Diemens announced its intention to merge with Critical Hit Entertainment PTY Ltd ("CHE"). The Company has been advised by Diemens that the deal with CHE did not complete. Blue Star has invested £133,000 in Diemens and holds an interest of 13.3 per cent. in the company.

Portfolio Activity and Valuation

Since making its initial £900,000 investment in six esports opportunities in November 2019, Blue Star has invested in total approximately £1,680,000 across seven companies.

Follow on investments have also been made in Guild Esports plc ("Guild"), Dynasty eSports Pte Ltd ("Dynasty") and most recently in FORMATION Esports SaaS ("Formation"). 

Based on the current valuation of Guild (GILD), which was admitted to the standard segment of the London Stock Exchange's main market on 2 October 2020, and the higher valuation achieved by Dynasty in its subsequent fund raises, Blue Star's esports portfolio is now valued at £3,715,890, showing an unrealised gain of £2,035,890 and an increase of approximately 120%.

Tony Fabrizi, CEO of Blue Star commented, "The overall performance from our portfolio approach is showing a significant return in year one. 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."