Genius Sports Limited (NYSE: GENI) saw its stock drop by 28% after announcing a definitive agreement to acquire Legend, a digital sports and gaming media network. The deal, valued at up to $1.2 billion, has sparked mixed reactions among investors.
The acquisition terms include $900 million payable at closing, with $800 million in cash and $100 million in stock. Additionally, there is an earnout of up to $300 million tied to performance metrics over the next two years. To fund the acquisition, Genius Sports plans to issue an $850 million Term Loan B.
According to the company, this acquisition aims to create a “digital sports and gaming media powerhouse.” By combining Genius Sports’ official sports data capabilities with Legend’s media platform, the company hopes to strengthen its position in the market. Notably, Legend generated 320 million annual visits from 118 million unique visitors in 2025, showcasing its significant reach.
Despite the stock’s sharp decline, Genius Sports remains optimistic about the deal’s financial impact. The company expects the acquisition to be immediately accretive to adjusted EBITDA margins and free cash flow conversion. Furthermore, it anticipates maintaining at least 20% group revenue CAGR through 2028. On a 2026 annualized pro forma basis, the combined entity is projected to achieve approximately $1.1 billion in group revenue and $320-330 million in group adjusted EBITDA.
In addition to the acquisition news, Genius Sports released preliminary unaudited financial results for 2025. The company reported group revenue of $669 million, reflecting a 31% year-over-year growth. Group adjusted EBITDA also saw a significant increase, rising 59% year-over-year to $136 million.
However, not all analysts are convinced. Guggenheim analyst Curry Baker lowered the price target for Genius Sports from $17.00 to $12.00, while maintaining a Buy rating. Baker emphasized that the key challenge will be convincing investors that the acquisition creates a differentiated media and sports betting ecosystem that is resilient to potential disruptions from large language models (LLMs).
In summary, while Genius Sports views the Legend acquisition as a transformative move, the market’s initial reaction suggests skepticism. The company now faces the task of proving the long-term value of this ambitious deal to its investors.
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