The market does not appear to love the up to $1.2 billion acquisition of gaming media company Legend by Genius Sports.
GENI closed at $6.19 Thursday, down 27.5% on more than seven times its average daily volume. That marks a new 52-week closing low.
Genius is paying $900 million up front with another $300 million payable as an earnout to Legend, which operates an online casino and sports betting affiliate network including Covers and Casino.org, according to Thursday’s announcement.
“This deal accelerates our strategic and financial objectives, supercharges fan monetization, and builds a fully integrated sports and gaming media network,” Genius CEO Mark Locke said. “For Genius Sports and our global partners, it delivers more data, more audience, more inventory and greater monetization of sports fans. The acquisition of Legend will drive higher margins and stronger free cash flow, positioning Genius Sports to immediately transform the market and grow the size and scale of our business.”
Stifel: Genius deal skews ‘net negative’
Genius’ media business is a key part of the company and the market is “under-appreciating” the clear synergies the Legend business brings, Jeffrey Stantial of Stifel said. In that respect, the selloff seems “excessive,” he added.
That said, performance marketing brings its own risks and cash flow volatility, and the 8.6 times 2026 EBITDA purchase multiple is higher than previous affiliate transactions, Stantial said.
“Bottom-line, we mostly agree with the strategic rationale outlined by management though still view the deal net negatively given the multiple paid, accelerated mix shift to more volatile marketing/media cash flows, and the introduction of a potential AI multiple overhang,” Stantial said.
Stantial is maintaining his hold rating and $10 target while Stifel does more work to understand the acquired assets and strategy.
2026 guidance published
Genius published its preliminary 2025 results and its 2026 guidance as part of the announcement.
Genius expects to hit $320 million to $330 million in adjusted EBITDA in 2026 on $1.1 billion in revenue with the acquisition considered. That would be up from $136 million in adjusted EBITDA on $669 million in revenue in 2025.
Locke noted in the conference call concerning the transaction that Legend helps Genius nearly achieve its 2028 goals outlined on Investor Day in December this year. The revenue goal for 2028 was $1.2 billion and is now bumped up to $1.6 billion, while the EBITDA expectation from 2028 moves to $550 million from $365 million.
