David Beckham’s gaming group is fighting for its survival, less than four year after it joined the London Stock Exchange.
Guild Esports – which runs teams competing in Fortnite, Tekken and other video game competitions – has told shareholders it must raise additional funds and reduce costs as it has only £25,000 in its account.
Guild shares dropped to a new record low of 1/4p on Thursday, giving the company just £1.3million in value. Since the company’s debut on the stock exchange in October 2020, they have lost 98% of their value.
The Guild’s float, back then, was seen as a test to see if the City had an appetite for esports. This booming industry is where professional video game players compete for large prize money.
As part of an initial public offering (IPO), the shares were priced at 8p, valuing the company at approximately £40 million. Guild, however, has had difficulty convincing the City after racking up losses of £26.6million over the last three-and-a-half years while only generating £14million in revenue.
The company’s top executives have published their first findings, which were based on a review of “strategic directions” that the firm has taken. Guild still has £25,000 left in cash, but bills totaling close to £1.4million need to be paid by the end of September.
The company expects to earn around £1.5m in the next few months. However, even if it all comes in, its financial situation will remain precarious.
Guild announced in an announcement to the stock exchange that “the company is actively exploring” a number of options for meeting its short-term obligations as they become due. “Measures being considered include additional funding, improved payment terms from creditors, and cost-reduction initiatives to conserve cash.
The board of directors is also reviewing the strategic direction for the company. This includes the sale of assets in order to generate cash, or whether it would be better to join a larger group.
Beckham, an early investor at Guild, was able to purchase shares of the company at a discount just before it floated. He is still one of the biggest shareholders with just over 3 percent.
Former footballer, who paid around £250,000 for shares that are now worth less then £50,000.
Beckham made millions of dollars from an influencer contract that required him to promote Guild on social media, and attend company events.
He earned about half of that before Guild renegotiated the deal two years ago. He received about half before Guild renegotiated the deal in 2009 so that Footwork Productions (Beckham’s image right company) would take a 20% cut of all sponsorship revenues and merchandise sales.
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