The Fractional Guide to Everything Derby

The 146th running of the Kentucky Derby will be unique for a multitude of reasons. While the stands at Churchill Downs will be missing the usual assemblage of elaborate headpieces, two upstart companies are providing the public with an opportunity of a lifetime. In a sport cloaked in affluence and opulence, where Derby horses were owned only by those with the deepest pockets, anyone can now become a shareholder for around $200. When the eighteen thoroughbreds break from the starting post, there will be mint juleps raised by hundreds of owners with backgrounds ranging from marketing assistants to stay-at-home moms thanks to MyRacehorse and SportBLX - pioneers who are revolutionizing the horse racing industry.

Marketplaces

‍
SportBLX: Labeled as an alternative investment platform for sports fans, SportBLX will step onto the Kentucky Derby stage and showcase their first world-class offering: Max Player. In a press release made public to investors this week, SportBLX Executive Chairman George Hall summed up his company’s mission to extend the opportunity of horse-ownership to the general public. “All of our shareholders have something in common with me - they love the game. It's gratifying to me to not only have a horse in the Kentucky Derby, but to share this joy with others in an accessible way, and we really are looking forward to bringing new shareholders on this week.” SportBLX has provided the public with two separate offerings featuring Max Player the first closed with over 480 investors, and the second, which is still open and offered through 'Annestes Thoroughbreds 2' has an additional 156 investors heading into the weekend. Investor Blaine Davis, an MBA student at Vanderbilt's Owen Graduate School of Management, highlighted the personal touch SportBLX provides its shareholders,“They’ve done a really good job looping in all investors before races via Zoom calls to discuss strategy and plans for the horse.”

SportBLX is currently offering shares of Max Player through Annestes Thoroughbreds 2 for $103 per share with a minimum purchase of two shares. They have a valuation on the Derby entrant of $2.35 million (up from a $2.25M valuation after the Belmont and a $1.75M valuation in February, per Darren Rovell), giving each investor 0.008% ownership per share. Although the percentage may seem low to someone unfamiliar with the industry, once you understand the barriers of entry into the world of horse ownership, not to mention it’s for a horse running in the biggest race in the world, even “owning an eyelash” as some investors have quipped, is an opportunity worth every penny.
‍

MyRacehorse: Since its inception in 2018, MyRacehorse has quickly become a household name at the auction block and the racetrack. Working with their partners at Spendthrift Farm, MyRacehorse has offered shares of over four-dozen horses to the public with a variety of prospects to suit the desire and budget of any investor. Building a community of horse owners has become an important piece of the MyRacehorse business model, with private Facebook groups available for owners of each horse to connect and an active social media team providing daily videos and updates of their lineup, MyRacehorse has developed an impressive following of over 13,000 people across Twitter and Instagram. Founder and CEO Michael Behrens highlighted the extravagant events MyRacehorse will provide owners Saturday leading up to the race. “We have two watch parties with content from trainer Bob Baffert, jockey Johnny Hall, Spendthrift General manager Ned Toffery, and several handicappers. We are also promoting the hashtag #MyAuthenticDerby where we are expecting a hundred or so group to be sharing their home party.”  Transparency and is an important aspect of the business and MyRacehorse offers a one-stop-shop for all updates, financials, and upcoming events through their free app.

Priced at $206 per share and listed at a $15.1 million valuation, one share earns Authentic owners a 0.001% stake and allows shareholders to participate in both racing and breeding revenues similar to Max Player.
‍

Insights

Max Player: With a pedigree that includes Secretariat and Seattle Slew, Max Player will step into the 2nd post position with the bloodlines and training of a champion. After working under the tutelage of the decorated and meticulous Linda Rice throughout the Summer, Max Player left New York to begin final Derby preparations with Hall of Famer Steve Asmussen. For Max Player to make his way to the winner's circle, history will need to be thrown out the window and streaks will need to be broken. It’s been 41 years since Affirmed broke away from the field and won from the 2nd position, the last Derby champion to kick out of the inside post since 1978. For Asmussen, he will be looking to finally saddle a Derby winner. The four-time Horse of the Year trainer has won 8,974 starts in his career but leaving the crown jewel of horse racing victorious is a challenge that has eluded him in 20 tries.  

Consistency has been the key thus far for Max Player. The three-year-old colt hasn’t missed the board, going 2-1-2 in five starts. While his top-end speed doesn’t match with the likes of Tiz the Law and Art Collector, his strength has been evident in races ranging from 9-10 furlongs. In his sixth Derby appearance, Ricardo Santana Jr. will take the reins Saturday and will be looking for his first Run for the Roses victory. Expect Max Player to keep himself in the race through the first two turns as his stamina should provide enough support to maintain a solid standing. The final sprint is where he will need to show improvement to compete with the field. Max Player has lacked the acceleration needed to pull away from top-level talent and will need to find an extra gear Saturday to distance himself from the field. While he’s a longshot at 30-1, the race isn’t run in a casino and his dependability makes him a must-use in trifectas and superfectas.  

Authentic: Even with injuries forcing his top two contenders Nadal and Charlatan to sit out the summer, it does not seem like legendary trainer Bob Baffert even flinched. Reaching into his extensive stable of talent, Baffert will send out a pair of colts loaded with potential in Thousand Words and Authentic. Although Thousand Words is coming off an upset win over Honor A.P in a contact-filled race at Del Mar, it’s the powerful speedster Authentic who opened with the third-best odds (8/1). In five starts he has four wins and one second, earning over $1 million in an already lucrative career. Two-time Derby winner John Velazquez will don the MyRacehorse silks and will guide Authentic against a field he is all too familiar with. The son of Into Mischief, Authentic outclassed Derby contenders Honor A.P., Storm the Court, and Thousand Words at the G2 San Felipe Stakes in March and then held off a late surge from Ny Traffic at the G1 Haskell in July. Criticized throughout the summer for lacking focus and maturity, he has shown steady improvement and will look to match stride with another front-runner, Tiz the Law. Authentic’s speed and prowess is unquestioned and was on full display as he dug into the second turn at Haskell, pulling away from a loaded field with a two-length lead into the homestretch. There are concerns regarding his endurance though, which was also on display in the last tenth of a mile in both his narrow win at Monmouth Park and in his lone defeat when he failed to respond to a move by Honor A.P. at the RUNHAPPY Santa Anita Derby. Authentic might be the only horse in the field willing to match pace with Tiz the Law through two turns so all eyes will be on the final furlong to see if his stamina has improved enough to challenge the overwhelming favorite.
‍

Wrap-Up

The 146th running of the Kentucky Derby will feature an abundance of firsts. For the first time, Authentic and Max Player will meet on the track Saturday, as over 1,000 shareholders across the country will tune in to watch not just any horse- but their horse break from the gate and jockey for position. For the first time, all the mint juleps will be homemade and the Kentucky bluegrass lining the infield will be bare of spectators. For the first time, the stands will sit empty and the roar of the crowd will be absent. As the horses dig deep and accelerate into the final turn there will be one more first. Thanks to two companies, for the first time, people of all walks of life, urge on not just a horse they may have wagered on or a horse who’s name they liked the most but their horse. Even if they just own an eyelash-worth.

‍
‍
‍
Disclaimer: The author is not affiliated with MyRacehorse, SportBLX, or any other entity involved in this offering. You understand that by reading Altan Insights, you are not receiving financial advice. No content published here constitutes a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. You further understand that the author(s) are not advising you personally concerning the nature, potential, value or suitability of any particular security, transaction, or investment strategy. You alone are solely responsible for determining whether an investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal financial situation. Please speak with a financial advisor to understand if the risks inherent in trading are appropriate for you. Trade at your own risk.