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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Do you have any ideas or suggestions how to invest in eSports, aside from investing in game publishers (Blizzard, EA)? While the publishers will clearly make money, it seems like the companies associated with streaming/tournaments/professional teams have a lot of growth potential as well. But eSports seems like the wild west right now, with lots of small outfits starting up 'professional teams'. Are there any companies in this space (teams/streaming/etc) that seem more legitimate than others?
I'd appreciate your thoughts on this industry and where you see the growth here.
Thanks!

Read Answer Asked by Michael on January 13, 2021

Q: Hi, I know that Chinese stocks are not your focus but I'd appreciate your comments if you have any thoughts.

In October, Huya, a gaming company announced that it would buy out Doyu at 0.73 of its own share early next year. From my understanding, once the buyout ratio is confirmed publicly, the price of the bought company (Doyu) should trade very closely to the bought ratio (0.73). However, Doyu is now trading at 20% less than the closed out price.

As of Dec 11, Huya closed at $20.35 USD and Doyu is at $11.71 USD. 73% of $20.35 should be $14.85. There is a big gap between the proposed buyout price and the market price. Do you know why this is the case? The gap doesn't make sense. Thanks.

Read Answer Asked by Esther on December 14, 2020