Genius Sports’ Largest Shareholder Selling Up to 23 Million Shares
Apax Partners, a British private equity firm that is the largest shareholder of Genius Sports, has started selling up to 23 million shares of the data provider, according to a press release Thursday morning.
It’s a significant number in terms of Genius Sports’ stock market presence: the 23 million shares is slightly more than 10% of all the equity in the business. Apax’s move prompted the market to join in and sell off Genius— shares fell about 10%, to $5.42, in early trading Thursday.
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With Thursday’s announcement, Apax will sell 20 million shares and give its underwriter the option to buy another 3 million shares in the next month. Assuming all 23 million shares are sold, Apax will still be the largest shareholder of Genius with just under 40 million shares, according to Genius’ latest annual report filed with the Securities & Exchange Commission.
Genius Sports declinded to comment.
Apax acquired all of Genius Sports in 2018 and injected $35 million in capital into the company to fuel the expansion of its global sports data and analytics business. In 2021, Genius went public on the New York Stock Exchange with a SPAC merger, reducing Apax’s stake to about 28% of the company.
While such a large share sale in the near-term will be bearish for Genius stock–20 million shares is roughly 10 times the volume Genius shares will trade in a single day—it could be a positive for the business in the long run. The Apax shares being sold will expand the float, or shares freely available to trade in the market, by 13%, potentially making it more attractive for outside investment funds to buy stock in Genius. That’s because investment funds are wary of owning so much of a stock that they can’t buy more or sell some in the future without dramatically affecting the share price – much like Apax’ action has done.
While Genius has about 227 million shares overall, well more than half—about 155 million—are held by insiders unlikely to sell, such as executives like CEO and founder Mark Locke (20 million shares) and external shareholders such as NFL Enterprises (15.5 million vested warrants convertible to shares).
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