Fantex Moves Forward With Vernon Davis IPO, With Initial Shares Priced At $10 Each
S.F.-based tech firm Fantex yesterday announced that the reservation period for Fantex Series Vernon Davis Convertible Tracking Stock will begin tomorrow at 12:01am ET. Fantex will be offering 421,000 shares of Davis stock at $10 per share. This is the first opportunity for investors to buy shares in a tracking stock linked to the value and economic performance of a brand (Fantex). In N.Y., William Alden noted the Davis stock offer represents "the second attempt by Fantex to pull off an athlete IPO." Fantex last fall "caused a stir on Wall Street and in the sports world when it said it would offer shares linked to the future income" of Texans RB Arian Foster. But "less than a month later, Fantex postponed the offering" when Foster was placed on IR. The company plans to pay Davis $4M for "the tracking shares, with the balance of the IPO covering the costs of the deal." For investors "to make money, the total value" of Davis’ future income has to be "more than" $42M. Fantex has "valued that potential money pot" at $61M. Unlike some other investments, the Fantex tracking shares "do not give the investor a direct legal right to the athlete’s income." The Davis IPO represents "a smaller portion of the athlete’s income than the one" connected to Foster, which, if it "eventually goes forward, would claim" a 20% share. Rather than trade on the NYSE or NASDAQ, the tracking stocks "will trade only on an exchange operated by Fantex, where there is no guarantee of liquidity." Fantex plans to take a 1% commission "from both the buyer and seller in any secondary transactions." Fantex at its core is "a sports marketing and management company, with plans to promote" Davis’ brand after completing the IPO. The company will keep 5% of the money "flowing to investors in the deal." Fantex to promote the offering "is holding a 'road show' tour across" the U.S. in a former Madden Cruiser, the "bus made famous" by Pro Football HOFer John Madden. Investors can "start reserving shares" tomorrow (NYTIMES.com, 1/28).