Events are accelerating at the headquarters of Motorsport Games, the owners of the Studio 397 development studio responsible for rFactor 2 , and it’s only natural that we should be concerned.
A few days ago I saw some intriguing news that made me arch an eyebrow, and that was that the shares of MSGM (its abbreviation in the stock market index) were going to undergo a “reverse split” or what would be the same, to put the shares together to maintain their value in the eyes of the market. The marked exchange value was 10 to 1, so a holder of 10 shares would receive one of the new shares, which, using some common sense, does not look like a good deal and indicates that something is not right.
To give you some background, MSGM shares have been listed on the North American technology index since 15 January 2021 (with a starting price of 20-30 dollars a share), at the height of the pandemic, and since then they have only gone down to the present day.
Losing more than 97% of its value does not seem to be an encouraging sign for the future of the company or its products, just when one of its biggest assets, rFactor 2 , is starting to take off with the work of third parties. In any case, the news has been accompanied by others that have not been so public and are now the talk of Twitter.
According to some sources (it has been impossible for me to find the official source of the news) at least five members of the board of directors have resigned, most of them due to the refusal to increase the capital through the issuance of new shares. The note outlines their particular disagreements, the compensation they will receive and who will take over their responsibilities, most of which will fall to Mr. Kozko, who is clearly the owner of Motorsport Games.
Well, that ain't good. Looks like the entire board of directors at motorsport games have resigned.
Gonna be interesting to see what transpires over the next few weeks, wonder if digital bros will be eyeing up a potential S397 acquisition? #simracing pic.twitter.com/98xvmXVgL5
— MrGit (@_mrgit) November 15, 2022
The resignations took effect on 9 November, just one day before the company’s Q3 financial review conference, which was postponed indefinitely until further notice from the company.
The most curious thing of all is that Fernando Alonso is a member of the board (or was, I have no idea where this stands now) and had a certain amount invested in the company from his time at McLaren and his friendship with Zak Brown who was chairman of Motorsport Networks in those days. Also several ACO executives, who have driven the virtual Le Mans series, have had or have invested there hoping to pay off, and it was they who banned in terms of exclusivity any more similar events and competitions.
We are seeing it these days in other markets linked to technology such as cryptocurrencies, and it is striking that the more celebrities there are involved in a business, the worse it is for the small investor. They tend to be so far removed from the real evolution of products and services that when the time comes for them to buy, it is usually time to look to new horizons. We’ll be keeping an eye on rFactor 2 and its future, and whether it can be saved from the looming storm clouds and fly solo again.
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