Investment Research report

Genius Sports Limited

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Genius Sports Limited
Mr. Irrelevant… It Doesn’t Take a Genius
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Research Overview

S&P 500
Aug 5, 2021

After conducting a forensic financial and accounting review, Spruce Point believes Genius Sports (“GENI”), a provider of live sports data from its partnerships with sports leagues to sportsbook customers, is just another intermediary that provides similar data to its competitors and will likely fail to capitalize on the wider industry growth. Based on our investigation, we forecast 60% t0 80% long-term downside risk, or $3.25 - $6.50 per share.

The report highlights several key concerns with the company, including:

  • We have concerns regarding Genius’ revenue growth and multiple signs of potential financial strain
  • We view Genius as an intermediary that provides data from sports leagues to sportsbooks which, as a result, will likely be subject to margin pressure from both sides as well as potential risk of disintermediation
  • An analysis of revenue attributed to “noncash consideration” as a result of value-in-kind / contra deals raises significant concerns regarding Genius’ revenue recognition and growth
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