The “road show†for the Arian Foster initial public offering has gotten off to a disappointing start.
On Thursday, a new company, Fantex, announced the first-ever athlete I.P.O., selling shares tied to the earnings of Mr. Foster, a star running back for the Houston Texans.
Three days later, on Sunday, Mr. Foster had one of the worst outings in his five years in the National Football League. He carried the ball just four times for 11 yards before leaving the Texans game in the first half with a pulled hamstring.
The chance of injury was one of the many risks Fantex disclosed in the Foster I.P.O. Fantex is selling about $10 million worth of stock to pay Mr. Foster for a 20 percent interest in his future income, which includes the value of his playing contracts, corporate endorsements and appearance fees. Shareholders will own interests in a tracking stock whose performance is intended to be linked to Mr. Foster’s future economic success.
Investors have the next couple of weeks to place orders. Unlike a traditional I.P.O., this offering has no road show where the company and its bankers meet with potential investors to promote the deal. Instead, marketing materials are limited to the Fantex Web site and a lengthy prospectus with 37 pages of risk factors detailing what might go wrong with the investment.
Fantex, based in San Francisco, has registered the I.P.O. with the Securities and Exchange Commission, and shares are going to trade on a trading platform operated by Fantex. The Foster offering is the
company’s first, but it hopes to issue more for additional football players as well as for other professional athletes and entertainers.
The company is focusing on small investors, with an investment minimum of just $10.
Making its debut with Mr. Foster, especially given the timing of the deal, had some people scratching their heads. Mr. Foster has led all running backs in touchdowns in two of the last three seasons, while racking up well over 1,000 yards each year - stats that placed him firmly in the game’s top tier of players, and made him a favorite in fans’ N.F.L. fantasy leagues.
But coming into this year, there was some uncertainty surrounding Mr. Foster, who had sustained a heavy workload and was showing signs of wear and tear with both calf and back ailments. Running backs historically have a high risk of injury.
Mr. Foster’s production trailed off somewhat through the first six weeks of this season, with just one rushing touchdown, though he led the A.F.C. in rushing with 531 yards. But on Sunday, in the Texans loss to the Kansas City Chiefs, Mr. Foster left the game during the first quarter with an aggravated hamstring and did not return.
After the game, Mr. Foster told reporters the injury did not seem severe. The Texans have a bye week on Sunday, which should give it time to heal.
Still, it seems that Mr. Foster’s latest health concern was exactly the type of bad news Fantex had hoped to avoid. The company planned to roll out the Foster I.P.O. at the beginning of the N.F.L. season to eliminate the possibility of an injury or slump, but it was slowed down by the regulatory approval process, according to people briefed on the deal.
It is unclear how the Fantex offering is proceeding since it began accepting orders last week. But on Sunday night, Buck French, a co-founder and the chief executive of Fantex, showed little concern about the setback.
“We are investing and working to build Arian’s brand for the long term,†Mr. French said. “His injury today has no bearing on that fact.â€
