Genius Sports Insiders Selling 6.62 Million Shares, NFL Has Substantial Stake in Company

Posted on: September 23, 2021, 09:42h. 

Last updated on: September 23, 2021, 02:17h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

In a filing with the Securities and Exchange Commission (SEC), Genius Sports (NYSE:GENI) revealed some insiders and early investors at the company are selling more than 6.62 million shares of stock. They also revealed that the NFL is one of its largest shareholders.

Genius stock
Genius Sports CEO Mark Locke, seen in an interview above. The NFL is a major owner of Genius stock. (Image: Bloomberg)

Insiders and investors are selling 6,624,939 million shares of Genius stock at a maximum price of $19.05 a share for $126.2 million in proceeds, according to the Form F-1 filing. Some of those shares are being sold in connection with various acquisitions the sports betting data provider made.

The securities covered by this prospectus include (i) 911,149 ordinary shares issued to certain securityholders in connection with the FanHub Acquisition (as defined below), (ii) 5,213,792 ordinary shares issued to certain securityholders in connection with the Second Spectrum Acquisition (as defined below) and (iii) 499,998 ordinary shares issued to certain securityholders in connection with the Spirable Acquisition,” according to the regulatory document.

Investors include are a pair of NBA owners: Steven Ballmer, owner of the Los Angeles Clippers, and Joe Tsai, owner of the Brooklyn Nets. The SEC document indicates Ballmer and Tsai are liquidating their entire stakes in Genius.

NFL Major Genius Investor

Through NFL Enterprises, the league’s venture capital arm, the NFL controls 11.25 million shares of Genius stock, based on warrants that can be exercised within 60 days. That’s equivalent to 5.3 percent of the company.

As reported by Sportico, the league is receiving 22.5 million warrants, meaning it can eventually control more than 10 percent of Genius and own more of the stock than CEO Mark Locke. The league received equity in the company as part of a six-year agreement struck with Genius earlier this year, by which the firm becomes the exclusive provider of the league’s data.

Genius doesn’t operate as a consumer-facing sportsbook. Rather, sportsbook operators buy data from the company and its competitors. It’s expected those purchases will increase over time, as regulated sports betting and in-game wagering increase in popularity in the US.

In addition to the stake in Genius, the NFL owns equity in Sportradar (NASDAQ:SRAD), Skillz Inc. (NYSE:SKLZ), Fanatics, and On Location Experiences. The league is generally a passive, long-term investor.

Arrangements of this kind are becoming common in the sports betting data space. For example, in July, the NHL and Switzerland-based Sportradar reached a 10-year agreement, and the league can take a stake of up to 1.8 percent in that data provider.

Insider Selling Common

Genius became a freestanding public company in late April, following a merger with special purpose acquisition company (SPAC) dMY Technology Group, Inc. II.

It’s common for early investors to sell stakes in emerging growth companies and those that come to market via blank check deals. This has been seen across the sports betting universe dating back to last year. For example, a slew of early investors dumped or trimmed stakes in DraftKings (NASDAQ:DKNG) over the past 15 months.