Date : July 6, 2020
New Opportunity: Sports Venues of Florida Inc. (OTCMKTS:BTHR)
- Dramatic potential in Multibillion-dollar eSports, Youth Sports media, and Sports Complex markets
- Now active commercial-stage player in eSports through Shadow Gaming subsidiary
- eSports tournament schedule set to ramp up in July, company starting to monetize
- Recent M&A move introduces $20M annual revenue potential in $76B US market as well
- Small <1M Share Float could drive dramatic squeeze expectations as news cycle develops
Evolution is part of life… and culture… and sports. With the advent of the technological means to compete in virtual space in more remarkable environments with more remarkable capabilities, the world’s attention will gradually, and perhaps inevitably, turn more and more to eSports to satisfy its competitive viewing “id”.
In fact, this may already be happening.
Total eSports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023, per Business Insider Intelligence estimates.
That puts the audience on pace to nearly double over a six-year period, as the 2017 audience stood at 335 million. As a result, the industry has seen a huge uptick in investment from venture capitalists, and more recently from private equity firms.
The number of investments in eSports doubled in 2018, going from 34 in 2017 to 68 in 2018, per Deloitte. That’s reflected in the total dollars invested, too: Investments are up to $4.5 billion in 2018 from just $490 million the year before, a staggering YoY growth rate of 837%, per Deloitte.
Sports Venues of Florida Inc. (OTCMKTS:BTHR), through its wholly-owned subsidiary, Shadow Gaming, Inc., is moving aggressively into the space, now hosting a series of major tournaments to build market positioning that will be directly monetizable. So far, from what we can see, the company is ahead of schedule, having recently closed out its successful launch schedule.
Looking forward, Shadow Gaming will hold 6-tournaments in July, 12-tournaments in August, 18-tournaments in September, 24-tournaments in October and by April 2021 the company will be holding 60-tournaments monthly. In addition to an aggressive push to increase the number of tournaments, the Company will immediately switch from a free-play platform for the gamers to a membership-based platform.
Initially each gamer will be required to pay a $25.00 monthly fee. As the tournament schedule increases so will the membership gamers will be required to pay.
In other words, revenue growth is about to get into gear.
The following report is based on our independent research of (OTCMKTS:BTHR), from publicly available information, including information from the company’s website and investor relations material, as well as news, disclosures, press releases, and other material relevant to understanding the company and its operations and assets. We have been engaged to disseminate our findings from that research process along with our opinion about (OTCMKTS:BTHR) based on that research.
Who is BTHR
Sports Venues of Florida Inc. (OTCMKTS:BTHR) is a commercial-stage company with multiple high-growth segments at various stages of evolution toward expanding operations in the eSports, digital sports, and sports complex markets.
The company, through its wholly owned subsidiary, Shadow Gaming, Inc., has aggressively entered the eSports market. The Company has placed on hold its plans to build sports complexes ranging from 80-acres to 300-acres that will include both outdoor and indoor athletic competitions. In addition, the company plans on operating a number of subsidiary companies from high tech data management businesses to product and support businesses.
According to a pre-COVID-19 report by Newzoo, the global eSports industry revenues will surpass $1 billion in 2020 with almost 500 million spectators.
After completing its first tournament last month, Shadow Gaming is already planning on hosting a tournament for the World War I FPS title Verdun, from developer and publisher M2H. Verdun is a squad-based multiplayer first-person shooter set in a realistic World War I setting. Released in 2015 after a year in Early Access, Verdun remains a popular FPS game and is a perfect fit for Shadow Gaming’s next eSports tournament.
With each tournament, Shadow Gaming will build a database of gamers from around the world. The Company expects to attract between 500 and 5,000 gamers per tournament. As the Company establishes itself as a “Must Participate” tournament provider, the Company will be gaining credibility and value. By the fall of 2020 Shadow Gaming is expecting to have a large enough following to command both independent studios and the global leading studios to pay Shadow Gaming to host tournaments under their flag.
While the company’s sports complex development operations have been put on hold, it continues to develop assets gained through its Live Youth Sports Network (LYSN, Inc.), which has a unique model to meet the robust unmet need of live-streaming youth sports events.
MarketWatch reports that the $17 billion domestic US youth sports market, incorporating over 60 million kids each year, is even bigger than the $15 billion NFL market.
LYSN is coordinating a nationwide network of technology and relationships with local youth sports venues and school boards to bring a dominant presence online and into full operations to deliver a service with effectively no competition.
For a good recent sense of perspective on the company, listen to a new podcast out feature Whitman, BTHR’s CEO.
Probably the biggest recent announcement here came in April, when the company announced that its wholly owned subsidiary Shadow Gaming, Inc., will start its summer gaming tournament schedule the week of May 17, 2020.
According to that release, Shadow Gaming, Inc., has been able to achieve unparalleled progress since its formation on March 25, 2020. Our goal is to become a dominant force in the global eSports marketplace. To accomplish this task and to ramp up quickly the Company has assembled an amazing staff of proven professionals in the eSports space. Fred Brizzi, founder of The Overpowered Noobs, LLC, is a worldwide recognized leader in eSports. Mr. Brizzi, through a sister company to The Overpowered Noobs, e4i (esports4indie), which he also founded, will be heading up Shadow Gaming’s tournaments. Shadow Gaming has agreed to employ e4i’s entire staff to coordinate, run and expand Shadow Gaming’s tournament schedule.
That set commercial-stage eSports operations into gear. Since then, that line of business has ramped up.
After that, last month, the company announced that it has completely revamped its Shadow Gaming tournament schedule. Currently, Shadow Gaming, Sports Venue’s subsidiary company, had planned on just two more gaming tournaments between now and the beginning of August 2020. Things have drastically changed for the better.
According to the release, the Current schedule simply wasn’t sufficient enough to catapult Shadow Gaming into a preeminent global leader in the eSports market. Management has invested hundreds of hours and is excited to announce it will hold 6-tournaments in July, 12-tournaments in August, 18-tournaments in September, 24-tournaments in October and by April 2021 the company will be holding 60-tournaments monthly. In addition to an aggressive push to increase the number of tournaments the Company will immediately switch from a free based platform for the gamers to a membership-based platform. Initially each gamer will be required to pay a $25.00 monthly fee. As the tournament schedule increases so will the membership gamers will be required to pay.
That was followed by stirring news that Shadow Gaming wrapped up its Minion Masters Summer Tournament this past Sunday, June 21, 2020.
According to that release, the tournament kicked off with over one hundred players going head-to-head in 1v1 matches, with eight impressive players making it into the final rounds. Going into the livestreamed finals, Katt and Nerzl were chat favorites to win. “I would never want to be the one going up against Katt, that’s for sure,” remarked host Superman. Caster XT agreed, speculating, “Katt may just be a bit too hard to beat.”
We would also enthusiastically point out the company’s announcement that it has retired all convertible notes issued to StarCity Capital, LLC. The original notes were issued on January 16, 2013, March 5, 2013, March 28, 2013, April 29, 2013, June 6, 2013 and July 1, 2013. With principal, interest, both default and non-default, the total paid to successfully retire all outstanding notes was $197,070. The final installment of $32,070 was paid Friday, June 12, 2020. All StarCity Notes were issued when the Company operated as Big Three Restaurants. None of these notes were related to the Company’s current operations.
In other words, a vast weight has been lifted in non-dilutive fashion.
John V. Whitman Jr., the Company’s Chairman and CEO, said, “First and foremost, I want to thank StarCity Capital, LLC., and it’s ownership for working with us to reach a settlement agreement that called for the Company to make timely payments in lieu of them submitting toxic conversion notices. If StarCity had submitted conversions, given the fragile trading history of BTHR at the time the settlement was reached, it would have required issuance of billions of shares and massive dilution. Additionally, I am certain had this settlement not been reached our stock price would have been sub-penny and remained there. We are working very hard for our shareholders. We are very proud of what we have been able to accomplish during this difficult time in US and world financial markets.”
BTHR shares are testing key Fibonacci Support, which is in play in the $0.40 area. The stock is already trading on a tiny float (<1M shares according to OTCmarkets.com). Hence, any fresh bidding can flip this into a squeeze extremely easily.
In addition, a quick glance across the oscillators will show any number of bullish divergences. We have highlighted the MACD histogram bullish divergence here.
The point with that signal is this: the character of the selling into the June lows was unsustainably sharp and directional, and cut too deep to have implications over the larger timeframe. It exhausted all willing weak hands very quickly, leading to oscillator readings that show it was more “oversold” than during prior pullbacks at much lower levels.
That is generally the type of thing you see in continued upward trends in our experience.
- BTHR is approaching major catalysts as it commercializes operations in the multibillion dollar eSports and Youth Sports markets from a disruptive integrated model
- BTHR has a float of less than 1 million shares, suggesting that any new influx of buying interest could propel the stock abruptly and significantly higher
- BTHR has recently announced that it is stepping up its Shadow Gaming tournament schedule and will begin monetizing the business, leading to initial revenue growth prints ahead
- BTHR is coming off a well-defined basing process that suggests smart-money accumulation over the past months following a bullish MACD divergence at key fib support
Sports Venues of Florida Inc. (OTCMKTS:BTHR) has a strong model, including a diversified strategic approach to multiple multibillion dollar markets, and has demonstrated a facility for both organic and M&A-driven growth potential withing the past year. The tight float underlying the stock suggests any positive catalysts will have the potential to dramatically impact share pricing based on mechanical supply/demand factors in the share market.
In addition, it has strongly aligned itself with the powerhouse eSports marketplace, where the pace of growth has only surged further in response to the COVID-19 pandemic as virtual competition has obvious safety advantages to real sports matches of any kind. However, even before the rise of the health crisis, the global eSports market was already a juggernaut.
Shadow Gaming, the company’s wholly-owned subsidiary, is already ramping up quickly as an emerging market leader in the making, with a huge run of tournaments set to pick up steam in July, August, and September, establishing it as a go-to force in the eSports market. That, along with the establishment of initial topline growth, may serve as strong catalysts in the weeks and months ahead.
The technicals largely line up with this view, by our read.