I.P.O. Linked to Football Player Opens for Trading

The football star Vernon Davis has arrived on Wall Street.

Stock linked to Davis, the San Francisco 49ers tight end, opened for trading on Monday on an exchange operated by Fantex, a start-up that has spent the last few months marketing the unusual and highly speculative deal. The trading debut - the first time Fantex has brought such shares to market - will provide a crucial test for the young company.

Fantex, a start-up in San Francisco founded by two technology executives and a venture capitalist, was dealt a setback after announcing last fall that it would sell shares linked to the future earnings of professional athletes. The company was then forced to put its inaugural initial public offering on hold when the player, Arian Foster of the Houston Texans, was placed on injured reserve.

After traveling the country to pitch the Davis I.P.O., Fantex said it sold all of the 421,100 shares, raising $4.2 million. Of that cash, $4 million will be paid to Davis, with the balance covering the costs of the deal.

The shares simulate a 10 percent interest in Davis’s future income, including the value of his playing contracts, corporate endorsements and appearance fees. For investors to make money, therefore, the total value of Davis’s future income has to exceed $42 million.

The “vast majority” of the shares were sold to individual investors, with some buying just one share and others buying the maximum allowed amount of 5 percent of the offering, Buck French, the co-founder and chief executive, said on Monday. The shares not sold to investors were purchased by Fantex.

The market for this stock will look vastly different than the New York Stock Exchange or the Nasdaq. Fantex offers no guarantee of liquidity, and the shares may be thinly traded at first. They opened around noon on Monday at $10 a share, the price that investors paid in the I.P.O.

The investment does not give buyers a direct legal right to the athlete’s income. Investors accept a range of risks, even beyond the possibility that the player could become injured.

While the stock simulates owning a portion of an athlete’s brand, it is actually an ownership interest in Fantex itself, and the company is allowed at anytime to dissolve the tracking stocks and convert them into shares of the management company.

Fantex, which at core is a sports marketing and management company, plans to promote Davis’s brand and keep 5 percent of the money generated by the investment. It also takes a 1 percent commission from both the buyer and seller in any secondary transactions in its market.

The exchange will observe unconventional trading hours. It opens at noon in New York (9 a.m. California time) and closes at 8 p.m.

“I’m just ecstatic to be here at this point,” French said. “We view it as a historical milestone both from a sports perspective and from a finance perspective.”