Shares of Signing Day Sports Inc. slid more than 61% in the Scottsdale-based company’s New York Stock Exchange debut on Tuesday, following its $4.8 million initial public offering.
Signing Day Sports, a platform that connects high school athletes with college coaches and recruiters, opened the trading day on the NYSE under the ticker symbol “SGN” at $5 a share. The company’s stock reached a high of $5.09, prior to closing at $1.93.
Signing Day Sports priced its IPO of 1.2 million shares at $5 each for proceeds of $4.8 million after deducting underwriting discounts and commissions and other offering expenses.
The company intends to use proceeds from the IPO for product and technology development, expansion of its sales team, marketing efforts and working capital, according to a regulatory filing with the U.S. Securities and Exchange Commission.
The IPO is expected to close Nov. 16.
Signing Day Sports’ IPO is downsized from its initial filing in May, consisting of 3.8 million shares at a range between $4 and $6 a share, which would have raised at least $15 million, a separate regulatory filing shows.
In October, the company scaled back its offering to 1.5 million shares at that same price range.
Signing Day Sports was not immediately available for comment on its IPO.
Company has incurred net losses prior to IPO
Signing Day Sports was founded by Arizona native Dennis Gile, a former pro football player, in 2019 The company’s platform helps high school athletes get discovered by college coaches and recruiters nationwide for football, baseball, softball and soccer teams.
The company has a subscription-based business model, charging $25 a month or $250 a year. Players can upload their statistics, technical skill videos, academic information and more on the platform, while coaches can share information on their teams, sports clubs or programs as well as communicate with athletes.
Signing Day Sports has inked marketing and sponsorship agreements with the Louisville Slugger Hitting Science Center, the U.S. Army Bowl, the Texas High School Coaches Association, and the Arizona Football Coaches Association.
The company, however, has incurred cumulative net losses since its inception.
In the regulatory filing, accountants expressed "substantial doubt about the company’s ability to continue as a going concern.”
As of June 30, Signing Day Sports' had cash and cash equivalents of $55,204. Its net tangible book value was $11.6 million — or about $1.52 a share — meaning investors buying stock in the company's IPO would see some immediate dilution of their shares.
Signing Day Sports generated $78,336 in revenue in 2022, compared with $340,984 in 2021. The company incurred a net loss of $6.7 million in 2022 and $8.8 million in 2021.
The company’s executive officers and directors — including current CEO Daniel Nelson — will collectively own more than 12% of the company’s stock after the IPO closes.
Nelson holds 814,851 shares, representing 5.5% of voting power. Gile will be company’s largest shareholder with 2.2 million shares, representing 15.5% of voting power.
