AB1 Share Price update, page-619

I'm not even sure that $2.50, let alone $3.50, represents good value in the present climate.

Animoca raised their last round off the back of decent revenue growth over the past 12-18 months, but more so due to the expectation of hypergrowth beginning this year. The raise was also conducted when the blockchain market was extremely frothy (maybe even irrational exuberance).

Fast-forward six months and growth stocks have been marked-down 50% and, in many cases, 70-90%, and crypto is also tanking. Analysts were expecting NFTs/blockchain to grow 3-5x this year and Animoca were banking on millions of new users entering the space. Instead, we are facing a bear market and NFT sector stats look pretty depressing. For example, transactions on OpenSea are down about 90% from ATHs.

None of this detracts from what Animoca are doing as an operating company (Yuga colab, Phantom Galaxies, acquisitions, JVs, partnerships etc), but the fact remains that the market is not prepared to pay the exorbitant prices that companies were fetching in late 2021. Whatever multiples VCs were using to value Animoca (10x p/s?), these have now been slashed (so too has the value of Animoca's investment portfolio and crypto holdings). Consequently, Animoca now has to deliver a huge amount of growth in order to justify the US$5b valuation - it could take 6 months or 6 years.

If Animoca keep delivering then the price will take care of itself; hopefully short-term pain for long-term gain.