Shares of the sports technology firm dropped 28% to $6.16 in midday trading, extending a difficult year for the stock, which has now lost roughly a third of its value over the last 12 months. The volatility follows the decision to pivot toward a more aggressive expansion strategy by absorbing the gaming-media specialist.
In section Market Quotes
Genius Sports Stock Plunges on $1.2 Billion Legend Acquisition
Genius Sports shares plummeted Thursday following the announcement of a deal to acquire sports media network Legend for up to $1.2 billion. The market's sharp reaction underscores investor concerns over the high price tag and the debt-heavy structure of the transaction, which aims to consolidate the sports data and betting media landscape.
Financing the Expansion
Under the terms of the agreement, Genius will provide an initial payment of $800 million in cash and $100 million in stock. An additional $300 million is tied to performance milestones over the next two years. To bankroll the purchase, the company plans to secure an $850 million term loan, a move that significantly increases its leverage according to the deal's financial disclosures.Despite the immediate market skepticism, management projects the combined entity will reach a pro forma revenue of $1.1 billion by 2026. Adjusted EBITDA is forecasted to land between $320 million and $330 million. The deal, which remains subject to regulatory approval, is expected to close during the second quarter of this year.
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