Genius Sports Selling $450 Million in Shares in Follow-On Offering

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Sports data and analytics firm Genius Sports will sell as many as 23 million shares in a secondary stock offering being led by Goldman Sachs, according to a release the company issued this morning.

Genius will sell 12 million shares itself, another 8 million on behalf of other shareholders and Goldman Sachs will have the option to purchase as many as 3 million shares for itself. At Monday’s closing price of $19.82, those shares are worth $456 million. The company wouldn’t receive any of the proceeds of the sale of the shareholders’ 8 million, but would collect capital from the rest, as much as $300 million.

The filing with the Securities & Exchange Commission shows that Apax, a private equity fund that acquired a large stake in Genius in 2018, is the biggest seller, registering 5.7 million shares. The London-based asset manager will still own 61 million shares of Genius, or 31.5% of the business. Also registering to sell is founder and CEO Mark Locke. Locke is selling 1.4 million shares, after which he will own 21.7 million, or about 11%, of Genius. Four other directors and a series of employees and other investors are selling smaller stakes. Notable non-sellers: Caledonia Funds, which owns 8% of the company, and the National Football League, which owns 5.9% of the company from a deal earlier this year which gave Genius exclusive rights to distribute gambling data to sports books around the world.

Genius went public by merger with a special purpose acquisition company in a deal that closed in April. The London-based company covers some 240,000 sporting events annually and has partnerships with 650 leagues and sportsbooks. In its first quarter as a public company, ending in March, Genius reported $54 million in sales, easily surpassing analyst expectations.

The sale of the additional shares announced today is a dilutive event that will likely push Genius stock price lower in the near term. However, Wall Street remains bullish on the business, with the company’s stock rated a ‘buy’ yesterday with a price target of $28 by the brokerage Needham & Co., with analyst Bernie McTernan saying the business is similar to ESPN, in that exclusive rights—in Genius’ case to league data—will be able to drive affiliate fees higher as sports betting expands in the U.S.

(This story has been updated with details of the sellers in the third paragraph.)

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