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  • Writer's pictureJesse Livermore

Staramba - rise of the living dead

Part of the Portfolio 12/2018

Germany has its fair share of prominent stock market promotors and well know but controversial business men. One of them is Rolf Elgeti. Elgeti, born 1976 in Rostock, Eastern Germany was an high flier for a long time. Early twenties UBS, Commerzbank and ABN Amro. Named one of the best stock analysts by Extel. Changed jobs in his 30ies (~2007) to real estate and became CEO of TAG Immobilien in 2009. Stock was around 2 Euros at the time. After a series of smart deal making combined with an renewed interest in real estate TAG shares went up 10 fold in a couple of years. He was a rainmaker!

In 2013 rumors on self dealing and shady deals break the news. Main accusations. Elgeti dealt in Real Estate projects for his own account. Several of them very close related to TAGs core business. (Link)

Elgeti changed jobs again, from CEO of TAG to Chairman of the board. Having made a ton of money he started investing on his behalf. Notable investments in listed and unlisted companies follow. Deutsche Konsum REIT, Creditshelf, Staramba, Francotyp-Postalia and Hansa Rostock.

Staramba was founded somewhere in 2013 by an Entrepeneur called Christian Daudert. Daudert and his Brother had an wealth management company in Rostock in the 90ies and had several soccer professionals as clients (Link).

He even wrote about about how soccer professionals invest. The original idea of Staramba was to monetize those player relations and to "digitize" professionals for upcoming AR and 3D Applications.

After having signed up well known former German Soccer Players Fredi Bobic and Hasan Salihamidžić he took in Rainmaker Rolf Elegi as a 30% shareholder and together they rode the wave...

After some Roadshow Marketing, Kung Fu Finance (Merging Staramba to an listed Company and changeing corporate structure to an SE) and some stock market drumming the then called Staramba AG stock went from EUR 23mn Marketcap to around EUR 150mn Marketcap. Revenue at the time tought to tell - but - around EUR 2mn.

At the beginning their business was collecting 3D models via photogrammetry of famous persons and soccer stars. They even digitized Bayern München at one point in time. Their core asset was the digital libary of stars, some of them 3D printed and those self developed 3D scanners.

Even though the quality of those 3D models was pretty awful. Matthias Reim a famous german 90ies one-hit wonder could have been an model for the walking dead too.

Later in 2017 they announced a product called "VR Star Island" which was claimed as a "Social Experience Software" where one could walk via VR-headset through an island populated with stars. Socital Network ala Facebook included.

For 2017 they guided a revenue of EUR 16mn at high profitability. In November 2017 (at the height of the Blockchain-hype) the Company announced that to issue their own Coin - "Staramba.spaces" for their own "Social VR-Network". (Link) Stock was still going strong - the high price was a price of EUR 64... A tenbagger in just two years.

Then on May 25th 2018 the company had to announce that their Auditor BDO did not sign their 2017 report. There were discussions on revenue and account recievables. Ouch time... the stock halved in just a short time.

There was some back and forth and the company announced to come clean with their 2017 report on Nov 30th 2018. At that day the company gave a statement that BDO would still give no signing to the new and restated report of 2017.

The new restated Annual Report 2017 was issued with an "Versagungsvermerk" (Decline of signing) from BDO. Some of the details: "In the restated annual report revenues stated are TEUR 12.049. The company could not prove evidence of TEUR 7.427." Some of the gory details included a bridge finance of Creditshelf (an Investment by Rolf Elgeti). On December 3rd 2018 Staramba announced to consider civil and criminal prosecution of BDO (Link) and some mudslinging followed. The key issue: Staramba tried to pull the Coin Offering with (most likely doubtful account recieables) as revenue, BDO declined. Recurring business... none.

This was the time when the Kapitalmarkthygienemusueum acquired a beautiful Staramba figure and got gifted a second one by a donor who had the same idea. (Great minds think alike :-D)

After that the stock went downhill... like a still twitching zombie.

That short would have been a full success over time.

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