Genius Sports (NYSE:GENI), which completed its combination with dMY Technology Group Inc. II in April 2021, announced this morning that it has started a solicitation of consents from holders of outstanding warrants to amend the exercise period so the warrants will expire on January 18, 2023, instead of on April 20, 2026.
If GENI is able to receive more than 50% approval from the warrant holders, then the holders will have the opportunity to exercise on a cashless basis and receive 0.26 common shares for each exercised warrant.
Additionally, Genius Sports issued warrant holders a notice indicating that the company has lowered the exercise price of the warrants from $11.50 to a price that is 74% of the closing price of the ordinary shares on the NYSE on the trading day prior to the date of delivery of an exercise notice. Yesterday’s close price was $4.49, which equates to $3.3226.
If the warrant amendment is approved, the warrants will stop trading on the NYSE on January 18, 2023 and all previously unexercised warrants will expire worthless on such date.
As of November 17, a total of 7,668,381 warrants were outstanding. The consent solicitation is expected to expire on its expiration date of December 16.
The company’s stock is currently down -2.48% in early morning trading following today’s announcement. GENI warrants (NASDAQ:GENIWS), however, are up about +50% to $1.20. Genius Sports hopes to simplify its capital structure and reduce the potential dilutive impact of the warrants through this solicitation, thereby providing the company with more financial flexibility.
dMY Technology Group, Inc. II originally announced its $1.5 billion combination with Genius Sports in October 2020 and completed the deal in April 2021. London-based Genius Sports supplies sports betting operators with official data and streaming media services and is partnered with about 500 sports organizations including the NBA, Premier League and NCAA.