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CANTON – An accounting change prompted by an SEC decision factored into a $126.1 million first quarter loss for the Hall of Fame Resort & Entertainment Co.
The accounting change requires the company to list warrants an option to purchase shares of the company s stock as a liability, which created a $116.4 million expense.
The Securities and Exchange Commission ruled in April that warrants issued by special purpose acquisition companies should be listed as liabilities. Hall of Fame Resort & Entertainment Co. formed last summer when Hall of Fame Village LLC merged with Gordon Pointe Acquisition Corp., a special purpose acquisition company.
The new company is developing the Hall of Fame Village powered by Johnson Controls, a nearly $1 billion campus around the Pro Football Hall of Fame. An office and retail building, Constellation Center of Excellence, is under construction and more work is expected to begin later this year.
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What happened
Shares of
Hall of Fame Resort & Entertainment (NASDAQ:HOFV) dipped 18.3% in April, according to data from S&P Global Market Intelligence. The stock has posted big gains thanks to excitement surrounding its entry into non-fungible tokens (NFTs), but the NFT craze seemed to cool off a bit last month, and some companies with substantial exposure to the space saw their valuations pull back.
Hall of Fame Resort & Entertainment s core business revolves around football-related resort and entertainment experiences, but the company s push into the NFT space has actually been generating more excitement. The stock soared 119% in March s trading amid expectations that the company s connection to the Pro Football Hall of Fame would aid its push in the NFT space. However, there wasn t any major news on that front last month, and it looks like the bulls are taking a breather after the big gains.