Guild Esports, a gaming group backed by David Beckham, is on the verge of collapse less than four years after its high-profile listing on the London Stock Exchange.
The company, which competes in video game tournaments on titles such as Fortnite and Tekken, has warned shareholders of its dire financial straits, with just £25,000 left in its accounts.
On Thursday, Guild’s share price fell to a record low of ¼p, reducing the company’s market capitalization to just £1.3m. Since its IPO in October 2020, Guild’s shares have fallen 98%, in stark contrast to its launch price of 8p, which initially valued the company at around £40m.
Guild’s entry into the stock market was initially seen as a crucial test of the city’s interest in the burgeoning esports sector, where professional gamers compete for huge prize money. However, the company struggled to win over investors, racking up losses of £26.6m over three and a half years while generating just £14m in revenue.
The company’s management has reassessed its strategic direction and published its preliminary results this week. With £1.4m of invoices due by the end of September, Guild’s financial outlook remains precarious despite the £1.5m of revenue expected in the coming months.
In a recent filing with the stock market, Guild stated: “The company is actively exploring a range of options to meet its short-term obligations. These options include securing additional financing, negotiating improved payment terms with creditors, and other cost-reduction initiatives.”
In addition, the board is considering broader strategic shifts, which may include selling assets for cash or possibly merging with a larger entity.
David Beckham, who was an early investor and bought shares at a discount before Guild went public, owns a stake of just over 3%. Despite investing around £250,000, his shares have since fallen in value to less than £50,000. However, Beckham has benefited greatly from Guild’s influencer deal, earning around £7.625 million to date from social media promotions and public appearances.
Beckham was originally set to earn £15.25m over five years under the deal, but two years ago the terms were renegotiated so that Footwork Productions, Beckham’s image rights company, would receive 20% of sponsorship and merchandise revenue.
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