‘It’s pretty crazy’: Big bet on delisted Animoca makes a multimillionaire out of Brisbane 21-year-old
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A high-conviction investment in a blockchain company kicked off the ASX last year has made one self-described “hustler” a multimillionaire at the age of 21.
After Animoca Brands was delisted in March 2020, Ishan Haque took the opportunity to up his stake in the Hong Kong-based non-fungible token (NFT) company, offering to buy shares at a 60 per cent discount to Animoca’s last traded price.
“I tried to talk to every existing shareholder I could,” Haque told Stockhead. “They were all panicking. NFTs at the time weren’t going anywhere and now their shares are illiquid and losing value fast. ”
In total he bought 1 million shares at 7c from seven investors, including 600,000 from the director of a well-known ASX200 company. (He asked us not to say whom.)
Animoca recently raised funds at $1.10 a share, making the company a rare Aussie unicorn (a non-public company worth more than US$1 billion) — and putting the value of Haque’s stake at the low seven figures. His total investment was $140,000.
“I’ve played video games as a kid so I fundamentally understood the marriage between NFTs and gaming. So when I came across Animoca while exploring stocks to invest in, it made total sense to me,” Haque said.
For the few that haven’t heard of NFTs, the tokens are un-copyable digital assets that exist on crypto networks like Ethereum. They can represent artwork, digital trading cards, or, in Animoca’s case, in-game items for its virtual worlds. Animoca also has an investment in Dapper Labs, the developer of NBA Top Shots, one of the most popular set of NFTs.
Haque said he got into investing in early 2017, as a first-year student at the Queensland University of Technology (QUT), where he joined an investing club. He also bought some Bitcoin when it was trading around $900 that year, although he didn’t make a fortune on it, he emphasises.
But that’s where Haque first heard about NFTs — the first NFT project, CryptoPunks, was released that year.
“That’s how I was initially exposed to it, and I’ve been a gamer my entire life. I was a pretty hardcore gamer… It has always made sense to me that you can turn these virtual communities and games into real-world value economies, making items tradeable.
“The entire thing made complete sense to me as a gamer interested in finance and crypto.”
So in early 2018, when Haque was looking to invest some of his savings from his online business ventures and crypto, he heard about Animoca’s pivot from mobile gaming to blockchain and NFTs.
“So that was really interesting to me and I thought, hey, I believe in this future, which direction this is going.”
Haque did his research and even exchanged emails with CEO Robby Young and chairman Yat Siu, “got really invested in their story and where they’re going.”
The company was also a client when he worked as a blockchain consultant during his second year of university.
Haque bought his first shares in Animoca at the time, when it was about a $40 million or $50 million company, Haque said.
Disaster struck in March 2020, when Animoca was booted off the ASX. While the ASX gave multiple reasons for the delisting, Animoca says the ASX’s biggest concern seemed to be the SAND ERC-20 token that Animoca had released to power its Sandbox virtual world game. (Ironically, that token has been a big factor in Animoca’s success.)
“Suddenly our investment’s illiquid and probably a lot of people thought it was worth zero,” Haque said. “So yeah, it wasn’t a great time to hold the shares, but I kept on looking into the space and what the company was doing, and to me it was pretty clear that the business and and the prospect of other entities were sort of nascent … that whole narrative didn’t change.”
There just seemed to be a misalignment between Animoca and the ASX, which was cracking down on a number of crypto companies at the time, Haque said.
“So I wasn’t personally too worried about their reasoning and why they wrote off Animoca at that point.”
In September and October he made his offer to other shareholders he sought out on Reddit, Facebook and Hot Copper.
“I had so much conviction that this was probably the best bet, the best asymmetric bet to be exposed to NFTs and crypto.”
Primary Markets facilitated the trading — they called Haque while he was at university, telling him the fees would be “pretty outrageous”. He told them he couldn’t afford the few thousand dollars in fees and negotiated them down. Filling out the paperwork took about a month.
As NFTs exploded in popularity this year, a Hong Kong fund offered to buy his 2 million shares for $1 million.
“That was a very hard thing to say to no to,” Haque says with a chuckle.
“But I just thought, y’know, if these guys were so aggressive in buying my shares at a premium, well, I think there’s something around the corner, I shouldn’t let this go.”
Less than a month later, Animoca announced the $113 million capital raising at $1.10 a share.
“It’s pretty, pretty crazy. Yeah, I’m very very happy, but I know I’m very lucky,” Haque said.
He thinks there’s plenty more upside in Animoca, noting that Dapper Labs raised funds in April at a valuation of US$7.5 billion – just a few weeks after raising funds at US$2.6 billion.
“So, if that’s any indication of the trajectory it could follow, I think there’s a lot more to go,” Haque said.
(Of course, there’s also some indications that the once red-hot NFT market is cooling off).
Haque said the money he used to invest came from his savings. In addition to his cryptocurrency transactions, he’s been working since high school and has started a bunch of small online businesses.
He also worked for a time in San Fransisco producing a podcast for media company The Hustle called My First Million, a gig Haque said he got after annoying venture capitalists and founders on Twitter. Eventually serial entreprenteur and host Shaan Puri made Haque his chief of staff, but he had to move back to Australia when the pandemic hit.
Lately he’s been working in Brisbane as head of growth for Wes Blundy’s The Curvy Group, an online bra retailer.
Haque was born in South Africa but came to Australia when he was four, growing up in regional Queensland. His parents are from Bangladesh.
“I like to say that my parents hit the lottery twice — got out of a pretty bad situation in Bangladesh, and then we lived in Pietermaritzburg in South Africa, which is isn’t the greatest place, but escaped that to Australia.
“So now third time’s the charm, with this Animoca investment, hopefully can retire my parents,” Haque said.
He suspects there’ll be a liquidity event within the year that’ll let him cash out. In addition to planning on supporting his parents, Haque is already plotting his next investment and thinks Bitcoin and Ethereum look attractive during the current correction.
“Shares wise, anything with a growth narrative will make a comeback I think,” he said in a post-interview follow-up message.
“I like Zip (ASX:Z1P) at its current levels, there’s much blue sky with Quadpay’s US growth and its foray into crypto/share trading.
“Sectors I’m heavily interested in is hardware AI or anti-aging sciences. In terms of small caps, I’m also looking for technologies that operate in nascent industries, founder led, tight inside ownership and blue sky narrative.”