Blue Star Capital shining brightly?

Main photo: Blue stars circle nucleus of Galaxy AM 0644-741. Credit: NASA, ESA, and the Hubble Heritage Team (AURA/STScI); Acknowledgment: J. Higdon (Cornell U.) and I. Jordan (STScI). Licensed under Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0).

I wrote last year about taking a small position in Blue Star Capital, the London-listed investment company focused on new technologies. I was particularly interested in their position in Guild eSports and predicted that Blue Star’s early investment in the eSports company, supported by football star David Beckham, might help propel the share price. But unfortunately my speculative investment in Blue Star didn’t pay off, and I later decided to liquidate this small position, which I really considered a toehold, and reinvested the cash directly into Guild. I took a small loss on Blue Star, buying in at 0.21p a share in September 2020 and selling at 0.17p per share in April this year. The company led by Derek Lew has further slipped since I sold out and in the last few days trades around 0.15-0.16p.

So why did I dump my holding and instead invest the cash directly in Guild eSports? Well, I’m going to go over a few of those reasons in this post, since Blue Star have just published their half-year report, and I’m going to do through some of my research. I like some of the investments they have made, notably Guild eSports, but there are other things that concern me.

The first thing about the half-yearly results was the omission of a few of the portfolio companies Blue Star has previously said they invested in. The results specifically talk about:

  • Dynasty Esports
  • Guild eSports
  • SatoshiPay
  • Sthaler
  • Leaf Mobile
  • NFT Investments

So what happened to the other 5 companies in the portfolio?

Well, these were indeed all referenced in the final results published on 12 January 2021.

  • Googly Esports
  • The Dibs Esports
  • Diemens Esports
  • The Drops Esports
  • Formation Esports

These investments were made at a cost of £720,000, according to the final results, giving them a current valuation at the time as cost. Now, I’m slightly confused why some of these investments are quoted differently in the final results (asides from the foreign entities), compared to the initial announcement for the investment, e.g. the investment in Googly Esports is said to be for £150,000 in October 2019, and £156,000 in the final results. But maybe I’m missing something here or overlooked an additional cost. What I’m more interested in, is what are these companies doing now?

Googly Esports

Googly Esports Plc is registered at Companies House in the UK, showing an address in London, that coincidentally, was recently changed to the same office address as NFT Investments. Last month it filed small company accounts for the year, signing them off on 1 June, and including an introduction that describes how the company engaged consultants to pursue an eSports venture that “utilised the infrastructure of the IPL”, but this didn’t succeed. We can only guess that IPL here refers to the Indian Premier League, the professional cricket league. The accounts say the company’s board continues to review its options. The numbers reveal a loss of almost £246,000, just over £2,000 in cash, and share capital worth £123,000. The notes for the share capital say 123m shares were issued in the period, and the confirmation statement dated 25 September 2020 reveals that Blue Star Capital owns 15m shares.

Logo for Googly eSports, via Facebook

Thankfully, there are few other traces of Googly online. It does indeed have a Facebook page, which uses an incredible photo of what appears to be a live eSports events taking place, complete with big screens, competitors and a crowd full of fans.

Photo of eSports event on Googly eSports Facebook page uploaded in November 2019

However, a reverse image search on TinEye demonstrates that this image has been used on the net since 2017 and I very much doubt it originates from Googly eSports. The fledging eSports company also has its own domain name using the .gg top-level domain popular in gaming and eSports – googly.gg, although there is no detail of the owner via a Whois search, and it appears offline.

Directors of Googly are:

  • Timothy Vincent Le Druillenec
  • Alexis Oliver Abraham
  • Michael Scott Edwards (resigned)

Shareholders are:

  • Timothy Vincent Le Druillenec
  • Caprice Management
  • Paniolo Ventures
  • 1219626 BC
  • Pioneer Media Holdings
  • Bamart & Partner
  • Pallasite Ventures
  • Growth Works Blockchain Innovation Fund
  • Adam Waldman
  • Appa Consulting
  • Blue Star Capital

The Dibs Esports

The Dibs is described as a female only eSports team on the Blue Star website, although it is spelt “Dibbs”, and is said to be a “US incorporated business based in Los Angeles”. However, it actually appears to be registered in Canada, as “The Dibs eSports (Canada) Corp”, according to the country’s online corporation information. Darcy Taylor is listed as the sole director and it would seem he is also the CEO at Leaf Mobile, another company in Blue Star’s portfolio, according to his LinkedIn profile. Kolina Kretzschmar describes herself as Dibs’ co-founder on her LinkedIn, although she finished working at the company in August 2020. The Dibs also had another employee working on a contract as eSports Manager for three months until February 2020.

The Dibs logo, via Facebook

The Dibs has more of an online presence than Googly – a Facebook page with 54 likes, a profile on popular gaming platform Twitch, and an Instagram account with two photos and 15 followers. In the same fashion as Googly, the website – thedibs.club – is now offline. So it seems unlikely that the company was very successful at putting together an all-female eSports team, which is a bit of a shame.

Diemens Esports

This Australian company was apparently to be merged with Critical Hit Entertainment, but in February 2020 this transaction fell through, according to Blue Star’s final results. There doesn’t seem to be much information about Diemens online. The company’s records list the registered address as Level 1, 53 Burswood Road, Burswood, Western Australia, which is a virtual office. It also has a contact address in Castle Hill, New South Wales.

The directors listed are:

  • Matthew Lodge, Singapore
  • Geoffrey Pollard, Singapore
  • Matthew Barry Le Cornu, Scarborough, Western Australia

Shareholders listed are:

  • Annecy Capital Partners, Paddington, Queensland, Australia
  • Paniolo Ventures, Vancouver, Canada
  • 1219626 BC, Vancouver, Canada
  • Andrew Frangos, Kent, UK
  • Smaller Company Capital, London, UK
  • Blue Star Capital
  • Growthworks Blockchain Innovation Fund I, Vancouver, Canada
  • Pioneer Media Holdings, Vancouver, Canada
  • Pallasite Ventures, Vancouver, Canada
  • Caprice Management, Singapore
  • Matthew Lodge, Singapore
  • Kies Technology Holdings, Geneva, Switzerland

The failed merger with Critical Hit Entertainment is of interest given that it appears to hold the trademark for the Australian eSports League, which runs high school and university leagues, according to their website. The AEL has various sponsors listed on its website and has been active in running tournaments for games including Rocket League and Super Smash Bros. Ultimate.

Asides from Blue Star, which holds 13% of Diemens, the other largest shareholders are 1219626 BC with 27% of the company, Caprice Management with 19% and Annecy Capital Partners with 15%, according to company documents registered with the Australian Securities & Investment Commission.

Critical Hit Entertainment are listed as an organiser, alongside Alibaba Sports, of a DOTA 2 tournament as part of the WESG 2019 Oceania Finals, according to the eSports Charts website. Although I can’t be 100% sure that this is indeed the same Critical Hit Entertainment that planned to merge with Diemens, but this would seem to make sense.

The Drops Esports

I can’t find this company on the Canadian government’s search tool for corporations, however, it is listed as being registered as a company in 2019 on a notice of incorporation for British Columbia. Downtime Digital Marketing boast of their work doing brand design and website development for The Drops in the portfolio section of their website. It lists the website address as thedrops.gg, although the site is offline at the moment. Interestingly, Downtime Digital Marketing also detail their work for Leaf Mobile, another company in Blue Star’s portfolio of companies, and Pioneer Media, a company already mentioned in this post, that we’ll talk about a little later on.

Banner for The Drops, via Twitter

The Wayback Machine can give us a look at archived pages from The Drops website, where it describes how the eSports outfit will field teams in Fortnite, FIFA, NBA2K and Call of Duty. Some of the posts on the site are written by Pavo Jurkic, who’s name also appears on a website for The Lords eSports team, which was previously the name for Guild eSports.

The Drops does have a Twitter account with 532 followers, but this went quiet in March 2020, and a Facebook page, with 16 likes, but this also went dark in May of last year. I don’t see any detail of any particulars of an actual team on these accounts, the Twitter profile reposts a lot of general eSports news.

Formation Esports

The last of these five eSports companies is Formation eSports SAS, which received a £115,000 investment from Blue Star. Formation is registered in France and uses an address in Sarlat La Caneda, in the Dordogne department of the country. It was set up in March 2020 by 50-year-old Jean Marc Vignon, according to company information on Infogreffe, which provides information on French companies. Shares equal to 41% of Formation’s capital are held by Canadian Michael Scott Edwards and Dominique Einhorn runs the company, according to data held by the French authorities.

Einhorn is also CEO and founder of Uniqorn, a French startup incubator and accelator, and his LinkedIn profile describes him as president of Sarlat Rugby. The financial director of Sarlat Rugby is Vignon, who describes himself as chief financial officer of Uniqorn on his LinkedIn profile, although he isn’t listed on the staff page of Uniqorn’s website. The list of staff on Uniqorn also indicates that the company has an assigned project manager for Formation.

Formation is active on the web and its site, formation.gg, is organising eSports tournaments for games including Fortnite, Valorant, Call of Duty and FIFA. These are marketed as free tournaments offering prize money of between $10 and $150, and seem to be attracting some players. A Free Fire Garena tournament run on 1 July registered 125 teams for the battle royale game, awarding $50 for second place and $100 for first.

A eSports tournament offered by Formation

Formation hasn’t yet streamed on its Twitch profile, but on Facebook in a recent post it says events will be shown live on Twitch, and it does embed some Twitch live streams from other users on the website. Just over 100 people like the Facebook page, 138 are following on Twitter and 6840 are following on Instagram. The website itself seems to offer a version in French and Spanish, although this doesn’t appear to be offered yet through a specific localisation option. It is obvious some of the tournaments are specifically aimed at Latin America.

Summary

From these five eSports investments that were omitted from the half year Blue Star results, I would suggest Formation is the only that seems outwardly active. The other four don’t have any real online presence, and for the two that aimed to develop eSports teams, The Dibs and The Drops, they didn’t really get off the ground. Googly and Diemens were more focused on pushing eSports through established partnerships or deals, but we only have Blue Star’s word on what was actually achieved, i.e. a failed merger in Australia and failed discussions with the IPL in India.

Other holdings

So after picking through £720,000 of eSports investments, let us return to the larger and somewhat more established holdings Blue Star has in its portfolio.

I’ve previously written a lot about Guild eSports and I won’t go into detail here, but it has just announced interim results and seems to be progressing nicely. It is inking sponsorship deals, expanding its roster of teams and generating a good following on social media. The share price closed at 7.55p on 2 July, and it had 518,617,362 shares as of March 2021. If we use Blue Star’s stated ownership of 5.95% in Guild from the final results, then this is worth about £2.3m.

Dynasty Esports

Dynasty is the final eSports company in Blue Star’s portfolio and it announced that Dynasty received $5m during a fundraising round earlier this year, valuing the company at $45m. This, after a top-up investment of $650,000, makes Blue Star’s holding worth $6.5m or approximately £4.6m. However, a news article on Dynasty’s website says it is actually valued at $50m, not the $45m stated by Blue Star.

Dynasty says it has created “the world’s leading mass-market eSports Portal Management (EPM) platform”, according to its website. It boasts of partners including:

  • Maxis, a Malaysian telecoms company
  • STC, a Saudi telecoms firm
  • Paidia, a female gaming platform
  • MESF, the Malaysian Electronic Sports Federation

The company is headquartered in Singapore and says it has a development centre in Kuala Lumpur. The registered address in Singapore on Telok Ayer Street is also the business address for Telok Partners, who Geoff Pollard, of Diemens eSports, is a partner of.

At the start of June, it announced the appointment of David Baxby as the company’s chairman and Daniel Horan as chief customer officer. They join Crispin Tristram and Matt Lodge, who are co-founders and co-CEOs, and Mike Edwards, who is also described as a co-founder, according to details on Dynasty’s team. You will remember these last two names from the company details for Formation and Diemens eSports. Another five members of staff are listed on the Dynasty website and according to a search on LinkedIn the company has 15 employees. The company is also currently hiring an additional eight staff members, according to the careers section of the website. These are mainly technical roles and based in Malaysia or Singapore. No salary details are given.

The announcement saying Dynasty would list on the Australian Stock Exchange in the next 12 months added that besides Blue Star and Pioneer Media Holdings, new investors include Alium Capital, a Sydney-based fund, and Mike Alexander, who was CEO at Jefferies in Asia and then involved in blockchain company Block.one.

Now to take a look at some of those partnerships in a bit more detail. Starting with Maxis, who offer mobile phone plans and broadband in Malaysia, I can’t find any specific information on the telecoms firm offering eSports tournaments, although they have previously sponsored eSports teams.

STC has an entire website, stcplay.gg, dedicated to offering tournaments including FIFA, Fortnite and Rocket League. Scrolling through some of the tournaments reveals a number of competitors signed up to events.

Tournament offered by STC Play, via stcplay.gg

STC Play is available as an app on the Google Play store, where it has more than 10,000 installs and a rating of 3.8 out of 5, and on Apple’s App Store, where it garners a slightly higher rating of 3.9 out of 5. The app on the Apple store lists the developer as Intigral International, which according to LinkedIn is a subsidiary of STC.

There is nothing that explicitly states on the front end that STC Play is using Dynasty to offer its eSports tournaments, but if we dig a little deeper it appears Dynasty is indeed the platform used by STC Play through servers hosted by Amazon Web Services using Swagger, a tool for creating web services.

On to Paidia next – the website describes the creation of a platform and community for women, which it says is currently being build behind the scenes. The CEO is Jill Kenney, who previously worked for Red Bull Canada, and Vivien Chuang acts as chief financial officer, she used to work for PwC. Stephanie Peloza is listed as co-founder and she has a following on Twitter, Twitch and YouTube, where she streams her gaming exploits. Also listed as a co-founder is Jonathan Bixby, who is involved in both Guild and Leaf Mobile.

MESF, the Malaysian Electronic Sports Federation, is also using the Dynasty platform on its website mesf.gg where a number of tournaments for different games are available. The Malaysian press have noted a five-year partnership mentioning a headline figure of 140m Malaysian Ringgit, worth some $33m. But I’m a little sceptical as to whether this actually means the MESF has paid Dynasty this amount, since it describes securing this as investment, so this is a little unclear.

Tournaments listed on mesf.gg

The tournaments listed on the site appear active and the MESF has over 55,000 likes on its Facebook page, although it hasn’t yet streamed on its Twitch profile. The website also features a leaderboard setting out rankings, trophies and points, and funnily enough, Celeste Koay, who works for Dynasty, is top of the league on MESF. There is an app for MESF on the Google Play store, and if we take a look at the URL it includes within the text “com.dynasty.esports” suggesting that Dynasty did indeed develop the mobile app. But it only has 100+ installs on Android devices and hasn’t been updated since October last year.

Dynasty eSports backend version 0.1 is being actively used by STC Play and MESF, although I’m not so sure Formation are using the same platform, I couldn’t confirm this. My next question is, who are Dynasty competing with? And a little cursory online searching suggesting they are not alone in providing an eSports management and tournament portal. Mainline, Gammastack and GYO all seem to be doing similar. Mainline has received funding worth $6.6m, raising cash in three rounds, including money from venture capital firm Work America Capital, according to Crunchbase.

SatoshiPay

SatoshiPay is a cryptocurrency company that has been around since 2014 and is focused on the Stellar blockchain network, which has its own tokens called Lumens. SatoshiPay develops the Sollar wallet for holding assets, a micropayments system designed for publishers and runs DTransfer for making business payments. SatoshiPay also recently received a grant from the Stellar Development Foundation to develop the Pendulum blockchain project, as announced by Blue Star. The amount of the grant was not revealed, but SatoshiPay had last year received a loan worth $0.5m from the Stellar foundation.

SatoshiPay in April published its annual company accounts for the year ending December 2020, which says current assets stand at £1.2m and creditors due within one year is £0.9m. The accounts qualify the company as a micro-entity, which means it must meet at least two of the following conditions: turnover is not more than £632,000, the balance sheet total is not more than £316,000, the average number of employees is not more than 10.

The company says it has 0 employees in the accounts. So I’m guessing maybe SatoshiPay’s workers are classified as contractors or something? 24 people are listed as employees for SatoshiPay on LinkedIn.

The accounts for the year ending December 2019 didn’t qualify the company as a micro-entity under UK regulations. It had net assets of £0.8m including inventories of £0.275m, which will include any cryptocurrency, and almost £0.5m of cash. Shareholder funds totalled £0.8m and current assets £1.1m. To me, this looks like SatoshiPay’s current assets increased slightly from 2019 to 2020, but it seems the overall financial position of the company has deteriorated and the creditors owed has increased substantially. Although with small company accounts it is hard to get the full picture without details of revenues. The number of employees in 2019 was two, so staff also reduced from 2019 to 2020, according to what was submitted to Companies House.

SatoshiPay has the following shareholders:

  • Aergo Ltd
  • Aeternity Anstalt
  • Axel Springer Plug And Play Accelarator
  • Blue Star Capital
  • Boersenmedien
  • Peter Burke
  • C2 Ug
  • Flakenwerder Investment
  • Galloway Ltd
  • KR1 Plc
  • Daniel Leonard Masters
  • Montanila Ug
  • Neofin Hamburg
  • Prinzenweiher
  • Quan Wo

It has three directors:

  • Meinhard Benn
  • Daniel Leonard Masters
  • Alexander Wilkes

Benn is the CEO of SatoshiPay, Wilkes is the chief operations officer and Masters is also chairman at CoinShares, a company working on digital assets.

Blue Stars says in its half year report that the grant received by SatoshiPay to work on the Pendulum network values the company at £19m. And Blue Star holds 27.7% in the London-based company, therefore its stake is worth £5.2m. This is up from £4.8m as stated in the final results, which used SatoshiPay’s last fundraising round as the reference point.

Let’s break down some of SatoshiPay’s different business activities. First up, Solar wallet, and if we delve into its listing on the App Store it provides us with a glimpse of a product that has had some difficulties in the past. The user rating is a high 4.5 out of 5, but users have complained about being unable to withdraw funds. The version history on the App Store shows that the app is regularly updated, with the last update coming in June. On the Google Play store we have a bit more information to look at – the wallet has been installed more than 10,000 times, it was also updated in June this year, and 81 reviews provide a rating of 3.8 stars out of 5. Once again, users have complained about problems with the app, some agast with their funds disappearing or transfers not happening. SatoshiPay does seem responsive to these concerns with several messages following up to reassure users. I did notice that at least one of the reviews came from André Gaul, who actually features as an advisor to SatoshiPay! These apps are free, but I notice that there are fees for making withdrawals, so presume that this is how SatoshiPay aims to recoup some of its development costs. If we take a little look at some of the wallets forming part of the Stellar network ecosystem, then the Solar wallet palls into comparison in terms of the number of installs on Google Play.

SatoshiPay said in June last year that it had processed €1m in payments for its publishing clients. And you will notice that some German publishers such as Boersenmedien and Axel Springer have a shareholding in SatoshiPay, with the idea being that publishers can offer access to single articles through micropayments, which would cheaper transacting on the blockchain rather than through traditional payment methods. However, I’m not sure whether this is still in operation. Der Aktionaer launched their SatoshiPay micropayment initiative in December 2019 and made a further announcement in October 2020, telling holders of the microcredits they could benefit from a deal on a subscription. Clicking through several articles on Der Aktionaer’s website, I don’t see any access offered through SatoshiPay, instead the premium content appears to have reverted to more traditional means of enforcing a paywall.

Der Aktionaer‘s paywall

A collaboration with Axel Springer through the Bild newspaper and its Tatorte app was launched in December 2019, but again I’m not clear if this is still running, despite SatoshiPay being referenced on the login for the website. I tried to create an account and access the service, but it said it isn’t accepting new users. On the App Store, it hasn’t been updated in one year.

Tatorte powered by SatoshiPay

SatoshiPay’s other area of interest is business to business payments through DTransfer that the company launched in September 2020. It currently supports nine countries and currencies:

  • EU
  • USA
  • Canada
  • Nigeria
  • Tanzania
  • South Africa
  • Mexico
  • Brazil
  • Argentina

The only mention of any clients I can find on the website is Uhuru Microfinance in Tanzania, which is run by German national Andreas Reiffenstein. I can’t really get a handle on the scale or size of Uhuru Microfinance nor its associated company Jamii Impact through their respective websites. Although a 2019-2020 report hosted on a Mennonite website details a portfolio of €95,000 worth of loans. Blue Star have said DTransfer has 11 business clients who are expected to transfer £70m annually.

DTransfer’s supposed advantage over other B2B payment services is the increased speed and reduced cost of carrying out transfers via the blockchain. But it doesn’t reveal what fees it charges on its website and you can’t sign up without getting in touch with them directly. In their 2020 review, DTransfer lauds the first instant transfer between Europe and Africa, but I keep asking myself why there isn’t more information about this online and why more people aren’t talking about it. Mobile money transfers have become a de facto form of payment on the African continent and big players such as Western Union still appear to retain a big slice of remittances from the African diaspora. If a new player was displacing all these incumbents using blockchain, why isn’t there more noise?

The other development for DTransfer was an agreement to use a stablecoin backed by German bank Bankhaus von Der Heydt. The advantage here is supposedly to provide a stable on and off ramp for transfers in euros when using the blockchain. Stablecoins have become a big deal in cryptoland and this would seem like a positive development for SatoshiPay. But searching around on StellarX Markets and the EURB stablecoin isn’t listed. It is, however, visible on Stellar Expert, which gives you access to the ledger for the Stellar Network. The data obtained through this isn’t very encouraging though. A total of 7 payments have taken place.

EURB asset on Stellar Expert

None of SatoshiPay’s initiatives appear to me as if they’ve really established themselves yet and their success is questionable, but of course, I can’t rule out a hive of activity going on behind the scenes. Maybe DTransfer is actually processing lots and lots of B2B payments. Perhaps the micropayment platform for publishers is still in operation, but I’ve missed the relevant publishers using this technology.

I’ll leave SatoshiPay there with just a last look at its operations as part of the Stellar network. It operates three public nodes in the network called validators, located in Germany, the US and Singapore.

SatoshiPay nodes as part of the Stellar network, via stellarbeat.io

Sthaler and Leaf Mobile

I’m not going to delve into these two companies since they account for much smaller portions of Blue Star’s portfolio. Sthaler operates a startup using technology from Hitachi to read the vein patterns in fingers in order to provide payments through a service called FinGo. It has been around for some time and is trying to branch out into age verification and other services. Trials have been carried out and the company has some partnerships with the likes of Mastercard and WorldPay. It also has some interesting shareholders, but Blue Star only holds 0.8% of Sthaler’s shares, which it valued in its final results at £347,000.

Leaf Mobile is Canadian company listed on the Toronto Stock Exchange developing mobile video games. It recently bought East Side Games and announced that it would acquire Truly Social Games, another mobile games developer. Full year revenue for 2020 came in at CAD$80.5m when combining figures from both entitites before the acquisition, and adjusted EBITDA was CAD$11.2m. The company currently has a market capitalisation of CAD$278m or approximately £162m, which with a very cursory look make the share price look cheap. Names mentioned elsewhere in this article including Darcy Taylor (The Dibs), Mike Edwards (Googly), Jonathan Bixby (Paidia and Guild) as well as Blue Star CEO Derek Lew are all on the board of directors. Based on Blue Star’s valuation of its Leaf Mobile as outlined in its final results, I calculate that it is now worth £125,000 to Blue Star.

Conclusion

I’ve tried to dig deep on Blue Star and its portfolio in this post to try and assess whether net assets are really worth £8.9m as the half year report states. At the current share, the market capitalisation stands at £7.5m, so a bit of a discount to the NAV. I’m not going to contest Blue Star’s valuation of Leaf Mobile and Sthaler, although I would guess that Sthaler still has a way to go before it is generating any kind of significant revenues. It faces significant obstacles in an industry with some big players with deep pockets. Nevertheless, taken at face value these two investments provide Blue Star with £472,000 in assets.

SatoshiPay appears rather opaque and I continue to question the actual development of the businesses, even though some of the technology and products look very sophisticated. Why isn’t there more visibility on DTransfer, what is happening now with micropayments service and is it going to continue to rely on continued funding by the Stellar network, who seem to throw cash at it periodically. Why hasn’t the EURB stablecoin gone to the moon? Lots of questions. Blue Star cite a pre-money valuation of £19m, which with a 27.7% shareholding would equate to £5.2m, but maybe this has been diluted with the fundraising.

I believe Guild is doing well and Blue Star’s holding is valued at £2.3m, Dynasty does seem to have something going on, and so does Formation, although to a lesser degree, but the other eSports investments appear dead, or at least devoid of visible activity for the moment.

I haven’t looked properly at NFT Investments, but a confirmation statement dated 2 March 2021 lists Blue Star CEO Derek Lew as holding 2m shares, before NFT Investments had its IPO and ahead of Blue Star announcing its investment for 9m shares. This makes me feel a little uncomfortable. Did Lew put money in before Blue Star, or did he get shares as some kind of introducer? It would have been more transparent to let Blue Star shareholders know either way.

I’m also slightly perplexed by the roster of companies and individuals who keep on cropping up in relation to Blue Star and lots of its investee companies. For example, Paniolo Ventures, who is involved in both Googly and Diemens, as well as holding 4.8% of Blue Star, according to the list of significant shareholders. But I can’t find any information on this company.

It is also very curious that Blue Star’s investment portfolio is exactly the same as Pioneer Media Holdings, and Pioneer also holds 6.6% of Blue Star. Pioneer has just listed on the AQSE Growth Market and is already got a listing on the Canadian Securities Exchange. Funnily enough, Pioneer includes Streaks eSports as part of its portfolio, but as I understand that was actually the former name of NFT Investments, which is also listed as part of its portfolio. A mistake maybe? The aforementioned Mike Edwards is CEO of Pioneer and Darcy Taylor is a director.

I don’t see anything wrong with this as such, it just strikes me as odd. Why are both companies identically aligned in the companies they invest in? And wouldn’t it be cheaper just to have one stock market listing, rather than two in the UK, and one in Canada.

Anyway, that brings me to the end of this research post on Blue Star. As I describe at the top of this post, I had already decided to cut my position in Blue Star and reinvest some of the funds into Guild directly. Some of their eSports investments don’t seem to be going anywhere fast, but I can appreciate the strategy of trying to hit several geographical markets at once and targeting both the development of eSports teams, leagues, specific sports link-ups as well as a portal product for management of tournaments, etc. Blue Star is trying to push aggressively into these markets and sometimes these startups don’t take off. However, a few of these don’t seem to have gone anywhere, and it would be helpful to investors, I imagine, to have more visibility on where that cash went and what the specific strategy was. Dynasty strikes me as interesting proposition, although maybe Blue Star is a bit quick to trumpet a possible multi-million pound valuation, when I think there’s probably more to look at here in terms of what competition it faces, how much the software service costs and what possible obstacles it could face from the games publishers themselves who might at some point want to get more involved in the running of these tournaments. SatoshiPay, as I’ve already mentioned, seems to have great ideas and technology, but I’m a little sceptical about its valuation. And in that sense, I think it would be better to take a closer look at the Stellar network itself. Maybe I should invest in some lumens! As for the likes of Leaf Mobile and NFT Investments, I too could invest directly in these companies if further research encouraged me to do so, since they are both listed, they really just are a small part of Blue Star. Wrapping up, I like some of Blue Star’s idea and direction, but don’t have 100% confidence in their execution and some of their moves perplex me, some of the investments seem highly, highly speculative and I’m a bit sceptical as to whether it is quite worth the current valuation as calculated by management.

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