Why is DraftKings stock trading lower Tuesday?
May 06, 2022 · In all, DraftKings' monthly unique payers leaped 29% to 2 million. Those customers also spent more on its betting platforms despite many facing significant economic challenges, such as higher ...
What happened to DraftKings?
Oct 06, 2021 · Shares of DraftKings ( DKNG -8.93%) have fallen 35% from their all-time high earlier this year, and are down over 25% in the last few weeks alone. The stock is …
What is DraftKings' full-year outlook?
22 hours ago · Draftking's net loss widened in the first quarter to $467 million. Given that stock direction follows earnings over the long term, the lack …
Why is DraftKings stock dropping?
Is DraftKings good stock to buy?
What will DraftKings stock be worth?
The 26 analysts offering 12-month price forecasts for DraftKings Inc have a median target of 28.50, with a high estimate of 60.00 and a low estimate of 16.00. The median estimate represents a +159.56% increase from the last price of 10.98.
Does DraftKings have a future?
Is DraftKings overvalued?
Is DraftKings undervalued?
Will DraftKings bounce back?
Is DraftKings profitable?
Who owns the most DraftKings stock?
| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 6.28% | 25,683,022 |
| ARK Investment Management LLC | 5.73% | 23,416,465 |
| T. Rowe Price Associates, Inc. (I... | 4.83% | 19,750,185 |
| Nikko Asset Management Co., Ltd. | 3.46% | 14,142,028 |
NASDAQ: DKNG
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DraftKings is trying to use its stock to acquire the competition, which will be tougher as the stock falls
Shares of DraftKings ( DKNG -0.28% ) have fallen 35% from their all-time high earlier this year, and are down over 25% in the last few weeks alone. The stock is down in part because growth stocks are falling as interest rates rise, but investors also haven't been pleased with DraftKings' very aggressive acquisition strategy.
A growth machine
DraftKings is absolutely a growth machine. The company grew revenue 73% in the past year, and expects to generate $1.21 billion to $1.29 billion in revenue this year.
NASDAQ: DKNG
Revenue growth doesn't come without a price, though. You can see above that the company also burned $425 million in cash over the past year, and that cash burn rate is growing as DraftKings spends on sales and marketing and expansion into new territories.
DraftKings' stock price is important
The falling stock price is important for a couple of reasons. First, stock sales can be used to fund organic growth initiatives, like spending on sales and marketing, as DraftKings has been doing. Given the cash burn rate above, DraftKings could use stock sales to fund further growth as more states open up sports betting and iGaming.
Confidence in DraftKings is key
Investor confidence in a company like DraftKings is key for the company long-term, because it allows management to grow and acquire competitors without having to worry about being profitable or cash-flow positive. The stock can be a piggy bank to be used when needed.
DraftKings is on a slippery slope
Despite being a major player in online gambling in the U.S., DraftKings needs to perform flawlessly and keep investor confidence to reach its potential. After the Entain offer, we're starting to see some cracks in the company's acquisition strategy and the stock is falling as a result.
A growth machine
DraftKings is absolutely a growth machine. The company grew revenue 73% in the past year, and expects to generate $1.21 billion to $1.29 billion in revenue this year.
DraftKings' stock price is important
The falling stock price is important for a couple of reasons. First, stock sales can be used to fund organic growth initiatives, like spending on sales and marketing, as DraftKings has been doing. Given the cash burn rate above, DraftKings could use stock sales to fund further growth as more states open up sports betting and iGaming.
Confidence in DraftKings is key
Investor confidence in a company like DraftKings is key for the company long-term, because it allows management to grow and acquire competitors without having to worry about being profitable or cash-flow positive. The stock can be a piggy bank to be used when needed.
DraftKings is on a slippery slope
Despite being a major player in online gambling in the U.S., DraftKings needs to perform flawlessly and keep investor confidence to reach its potential. After the Entain offer, we're starting to see some cracks in the company's acquisition strategy and the stock is falling as a result.
DKNG Stock Is Hitting Bottom
If you bought today and the current analyst median target price comes to fruition by the end of 2022, investors are looking at almost 89% upside. That’s a pretty healthy one-year return.
The Bottom Line
I believe DraftKings has a strong brand. The addition of Golden Nugget Online Gaming will undoubtedly help bring some balance to a business driven primarily by sports betting. Using stock to buy GNOG, I think GNOG investors will be happy long-term with the decision to sell to DraftKings.
