What happened
Genius Sports (GENI 0.39%), a company that provides data services to a host of professional athletic organizations, wasn't looking like a dominant player on Thursday. Its share price fell by more than 6% on news of a stock sale, on a day when the S&P 500 index rose by 0.8%.
So what
The seller is an entity called Maven TopHoldings, which is unloading 20 million ordinary shares of Genius Sports in an underwritten public offering priced at $5.35 per share. The sale's underwriter, Goldman Sachs, has also been granted a 30-day option to collectively buy up to an extra 3 million shares of the company.
Currently, Maven TopHoldings owns just over 54.3 million ordinary shares, giving it slightly more than 25% of Genius Sports' shares outstanding. Following the sale, its holdings will be cut to anywhere from 14.5% to 15.8%, depending on Goldman Sachs' take-up of that underwriter option.
In both its press release and latest regulatory filing about the share sale, Genius Sports stressed that it will receive no proceeds from the divestment. This is because it is not the selling stockholder.
Now what
It isn't clear why Maven is unloading a large part of its Genius Sports stake. Regardless, the price it set is 12% below the stock's close on Wednesday, hence the negative investor reaction.
Obviously, though, many in the market still believe Genius Sports is a viable investment, as it closed Thursday $0.32 per share above Maven's sale price.
