Very interesting company.
However, the one thing I'm worried about with the company is there is a ton of goodwill on the balance sheet. If you don't know, goodwill is essentially what a company pays over and above a company's fair value in an acquisition.
So, an easy example of this is if someone wanted to buy Ford, and Ford was fairly valued at $5 a share (I'm just making up numbers here as an example) but a company paid $8 a share. That extra $3 would go onto goodwill in the balance sheet.
Why would someone pay more for Ford? Well, primarily their brand of course. It's easier to sell a car when you've got arguably the most popular vehicle brand in the world behind it.
The company's most recent acquisition cost them around $47 million, where nearly $27 million was goodwill.
This isn't a be all end all. But, it's something you need to keep a very close eye on. This company is overpaying for acquisitions right now.
This is a very, very hard company to value. Their media and content revenue increased tenfold year over year. However, how much of that was organic growth or acquisitions (it doesn't really provide a clear explanation of this in its financials), and more importantly, how much of this growth was because of the lockdown and people being at home all the time? We can see that revenue from its Esports segment actually dropped by a pretty decent margin in 2020 due to lockdowns.
Total revenue year over year is up tenfold, but cost of sales have increased 20X, making margins slimmer.
This is just a company that is nearly impossible to evaluate, as it IPOed during a year where digital media has thrived. I'd need to see them in a year of normal operating conditions.