Signing Day Sports Inc., a Scottsdale sportstech startup that debuted this week on Wall Street, saw its shares lose value in its first four days of trading after staging its initial public offering.
The company issued its shares at $5 but saw the stock dip sharply on Nov. 14, its first day of trading, to close at $1.93 after briefly moving past the IPO price to reach $5.06 early in the day. On Nov. 15 the stock fell again to $1.40 before regaining some of its losses to close at $1.54 on Nov. 16. Friday, the thinly-traded shares closed at $1.35, down 12.34% for the day and 73% for the week.
The company had initially hoped to sell as many as $3.8 million shares at as much as $6, but lowered those expectations before eventually finalizing the terms of the offering when trading began Nov. 14
Signing Day Sports (NYSE American: SGN) sold 1.2 million shares for gross proceeds of $6 million, with a net of $4.8 million after offering expenses were covered. But the company said Thursday it is granting underwriters a 45-day option to sell up to an additional 180,000 shares at the $5 offering price to cover offering over allotments, that would bring in another $900,000, less expenses, if all the shares are sold.
Boustead Securities LLC is the offering underwriter.
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.
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 incurred a net loss of $6.7 million in 2022 and $8.8 million in 2021.
Singing Day Sports’ executive officers and directors — including CEO Daniel Nelson and founder Dennis Gile — collectively own more than 12% of the company’s stock in the wake of the IPO.
Nelson holds 814,851 shares, representing 5.5% of the outstanding share float. Gile is the company’s largest stockholder with 2.2 million shares, representing 15.5% of the total number of issued shares.
