Background:

On 4/2/21, we dropped a graded copy of Halo: Combat Evolved (Wata 9.8, A+ Sealed, Xbox) on Otis for $31,600 ($10.00/ share). 

We recently received a buyout offer for the game for $110,000 ($34.82/ share), which would represent a 248% gain vs. the initial drop value. This sale would also represent the highest Xbox game sale of all time.

The last traded price for the asset (as of close of trading on 8/31) was $13.00/ share. Shareholders should have received an email regarding this offer and have been asked to provide feedback by Friday, September 3rd at 5pm ET.

Our Analysis:

This offer represents a sizable return for investors who purchased shares upon the initial drop – a reflection of the strong upward trajectory of the collectible video game market as a whole in recent months. 

Given the scarcity of our copy of Halo: Combat Evolved, there are no exact comparable sales to use to estimate fair market value. Our copy (Wata 9.8 A+ Sealed) is the single highest-graded (known) copy in circulation. Additionally, this specific version was for Microsoft employees only and was never available to the public, adding to its scarcity. 

The most relevant recent sale was for a 9.6 A copy on July 11, 2021 for $31,200 on Heritage Auctions. Typically, we see a 2x multiple between 9.6 and 9.8 grades; however, the Heritage sale copy is not directly comparable to the Otis one. The Otis copy is a rarer “Not for Resale” version that was never available to the general public. This, combined with it being the single highest graded copy, could warrant a substantial premium against the standard multiple, though it is difficult to infer a concrete number to this premium.

An independent analysis by Alternative Assets concludes an inferred value of $65,000-$90,000 based on the same July 9.6 A sale, and the sale of an 8.5 A “Black Label” copy.

As always, evaluating a buyout offer like this one is largely contingent on how one views future market movement in the collectible video game space. While the market has been red hot of late and could continue its upward trajectory, recent developments in the space could lead to some amount of price correction. 

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IMPORTANT UPDATE (9/1/21, 4:20pm ET):

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This morning, we received a counter-offer, and the two potential buyers subsequently submitted multiple competing bids.  

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The resulting new final buyout offer is $155,000. This offer would net investors $49.06/share, representing a 390.6% gain vs. the drop value and a 277.4% gain vs. the last traded price.

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RESULT (9/3/21, 6:30pm ET):

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The offer was accepted. The results of investor feedback were 71.7% approve and 28.3% reject, weighted by shares.

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The final buyout price was $301,000 after multiple competing bids continued to be submitted.

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The final net payout of $95.26 / share represents a return of 852.6% vs. the drop value of $10.00 / share and a 632.8% gain vs. the last traded price of $13.00/share.

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To discuss this offer with other Otis users, join the conversation on Discord.