Esports entertainment company Allied Esports has withdrawn its proposed public offering of common stock.
The company announced its intention to launch a public offering on January 29th.
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Paperwork to confirm the withdrawal of the public offering has been filed with the US Securities and Exchange Commission (SEC). Allied Esports will instead see its Chairman of the Board of Directors, Lyle Berman, commit to purchase newly-issued shares of common stock.
Should the proposal come to fruition, Berman will buy up to $2 million (£1.6 million) of shares from the company. The option for him to do so will last up until April 9th. He has agreed to not sell, transfer, or dispose of such shares for a six-month period following the commencement date.
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Allied Esports has stated that it “plans to use the proceeds from the common stock sale for working capital and general corporate purposes.”
The company announced that it was set to receive $5 million (£3.84 million) from real estate firm Brookfield Property Partners last month. It was acquired by Black Ridge Acquisition Corp. last August, following investments from both TV Azteca and Simon Property Group in June and July respectively.
Esports Insider says: We don’t have definitive information on the motivation behind the withdrawal, but it is possible that the company didn’t generate the interest and number of potential shareholders desired. Going public is always fraught with risks, though the $2M buy-in from Berman seems safe as he’s already massively involved with the company.