MyRacehorse Awaits Regulatory Approval on Top Horses

With a regulatory review taking longer than usual, MyRacehorse has not yet been able to sell micro-shares in two-time champion Monomoy Girl  and two-time grade 1 winner Got Stormy , but the stable is not aware of any specific issue of concern in the review process.

MyRacehorse founder and CEO Michael Behrens said while the regulatory process has taken added time on the two horses, the Securities and Exchange Commission has been in regular contact with MyRacehorse and is working through the usual process. MyRacehorse, which offers buyers micro-percentage shares in horses, operates under Regulation A with the SEC.

MyRacehorse bought into the racing rights of Monomoy Girl after the 2018 champion 3-year-old filly and 2020 champion older dirt female was purchased by Spendthrift Farm for $9.5 million at The November Sale, Fasig-Tipton's premier breeding stock sale in Lexington. Under terms of the lease agreement, MyRacehorse will control 51% of her racing rights, which were purchased from Spendthrift for $300,000 (Sol Kumin's Madaket Stables also owns a minority percentage of the Tapizar   mare's racing rights).

The evaluation of the mare for MyRacehorse partners is $469,200, which includes all racing and training expenses plus management fees. There will be 10,200 shares offered and partners will be able to purchase a 0.005% share in the Monomoy Girl lease agreement for $46. 

MyRacehorse is offering similar terms and conditions for microshares of Got Stormy, who was second in the 2019 TVG Breeders' Cup Mile (G1T). The now 6-year-old Get Stormy   mare was purchased by Spendthrift for $2.75 million at The November Sale and kept in training and sent back to trainer Mark Casse for a 2021 campaign.

A total of 5,100 microshares of Got Stormy will sell for $45 for a 0.01% share. MyRacehorse leased 51% of her racing rights for $125,000.

Potential shareholders have been able to express interest in either or both mares through the MyRacehorse website but neither officially has been offered as the stable awaits SEC approval. Behrens said sometimes these processes require some patience on the investor side, but he thinks such regulation is good for all involved. He said MyRacehorse has always understood that the SEC can put in its due diligence.

"We're governed by the SEC and we have to go to their timetables," Behrens said. "This one is taking a little bit longer but they've been in good communication. There's no real concern or anything; it just kind of comes with the territory in being governed by the SEC, which I think is good for everybody."

Behrens said the good news for investors is that they will be credited with any purses earned by the mares from Dec. 20, 2020. To date, that would mean investors in Monomoy Girl would be credited for her victory in the $250,000 Bayakoa Stakes (G3) Feb. 28 at Oaklawn Park and investors in Got Stormy would pick up credit for her score in the $125,000 Honey Fox Stakes (G3T) Feb. 27 at Gulfstream Park.

"That's what I always tell people. It's great," Behrens said. "If you get frustrated, don't worry about it. Just watch the races and then you can decide what to do based on performance. How often does that happen?"

Trainer Brad Cox is preparing Monomoy Girl for a start in the $1 million Apple Blossom Handicap (G1) April 17 at Oaklawn. Behrens said Casse has not locked in the next start for the versatile Got Stormy, who has enjoyed success sprinting and in routes on turf, against other females and against males.

One possible reason for the SEC's delay could be the change in administrations following the election of President Joe Biden. Behrens said there are no new regulatory hurdles; in fact, he noted that a major restriction on the stable has been relaxed.

"There was an update to Reg A, and if anything, it is more advantageous for us. We can now raise $75 million, instead of $50 million, which is good," Behrens said. "We were excited to see that, and if anything, they continue to move in a direction that's more favorable to our kind of small business—capital formation."