DKNG - DraftKings Inc.
Chart Events
Commodity Channel Index
Performance Outlook
- Short Term2W - 6W
- Mid Term6W - 9M
- Long Term9M+
| Previous Close | 33.10 |
| Open | 33.83 |
| Bid | 32.77 x 800 |
| Ask | 32.81 x 800 |
| Day's Range | 31.85 - 34.24 |
| 52 Week Range | 9.76 - 44.79 |
| Volume | 6,612,886 |
| Avg. Volume | 11,293,787 |
| Market Cap | 11.553B |
| Beta (5Y Monthly) | N/A |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | N/A |
| Earnings Date | May 15, 2020 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | 47.09 |
Fair Value
Related Research
- GlobeNewswire
DraftKings Retail Sportsbook Makes Colorado Debut at Mardi Gras Casino
BOSTON, July 09, 2020 -- DraftKings Inc. (DKNG: NASDAQ) and Twin River Worldwide Holdings’ (TRWH: NYSE) Mardi Gras Casino announced the opening of their temporary retail.
- Barrons.com
SPACs Are Booming. These 21 May Be About to Announce Deals.
Barron’s screened for SPACs that are less than six months from their deadlines (thus might be about to announce deals), and compared their market prices to their current estimated trust value per share.
- Barrons.com
Big DraftKings Investor Bought Up an Embattled Biotech Stock
An Atlas Venture affiliate just paid $10 million for more shares of Magenta Therapeutics. Atlas is also the fourth-largest shareholder in sports-betting company DraftKings.
- GlobeNewswire
DraftKings an Official Partner of the Nathan’s Famous Fourth of July International Hot Dog Eating Contest
Major League Eating announced today that DraftKings (DKNG) is an official partner of the 2020 Nathan’s Famous Fourth of July International Hot Dog Eating Contest. It was recently announced that the annual contest, an American holiday tradition typically held at the Nathan's Famous flagship restaurant in Coney Island, NY, will be conducted this year, albeit in a private location with proper health and safety guidelines in place. DraftKings, a leader in the digital sports entertainment and gaming industries, will be an Official Partner of the 2020 Nathan’s Famous Fourth of July International Hot Dog Eating Contest.
- Bloomberg
Ron Burkle’s Yucaipa Explores Forming Blank-Check Company
(Bloomberg) -- Billionaire Ron Burkle’s Yucaipa Cos. is exploring raising capital through a blank-check company, according to people with knowledge of the matter.Yucaipa has interviewed investment banks ahead of a potential transaction, said the people, who requested anonymity because the talks are private. A capital raise would likely occur this year if the investment firm moves forward, one of the people said. No final decision has been made, this person said.A representative for Yucaipa declined to comment.Special purpose acquisition companies, or SPACs, raise money from public investors with the goal of buying a company they haven’t identified yet, usually within two years. Merging with one has become a popular way for companies to go public as the coronavirus pandemic upends the markets. Companies including DraftKings Inc., Utz Quality Foods, F45 Training Holdings Inc. and Shift Technologies Inc. have agreed to go public by merging with SPACs this year.Burkle -- a co-owner of the National Hockey League’s Pittsburgh Penguins -- founded Yucaipa in 1986, according to its website. The firm counts private members club Soho House among its investments and last year sold its stake in Freehand HotelsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Barrons.com
Uber Is Reportedly Close to Deal to Buy Food-Delivery Rival Postmates. Postmates Has Other Options.
A combination of Uber and Postmates would reduce the number of major U.S. players in food delivery to three, including Uber Eats/Postmates, DoorDash, and Grubhub.
- TipRanks
Insiders Are Dumping DraftKings Shares — Should You Panic? This Analyst Says No
Last week, along with the market retracement, shares of online sports betting company DraftKings (DKNG) dropped by 20%. The plunge cannot detract from the fact that since going public through a reverse merger in April, the stock has still outperformed the market considerably – up by over 70% (and by 210% since the turn of the year including the period prior to the reverse merger when trading as Diamond Eagle).Some company insiders took advantage of the rally by unloading their shares last week. A recent SEC filing showed that DraftKings founder and other top brass offloaded $596 million worth of shares on June 23. Selling after a massive rally makes sense, but the extent of the offloading is curious, nonetheless.However, Rosenblatt analyst Bernie McTernan dismisses the short-term noise and implores investors to “own shares for the long-term bull case.”“As the gambling industry in the US is emerging, we believe online players will take the dominant share and DKNG should be a leader. Near-term catalysts to own the stock now are the return of live sports and the potential acceleration of gambling legislation from COVID-19. In our bull case, we believe the stock can triple,” McTernan said confidently.Driving McTernan’s bullish thesis is the differentiated approach to gambling in the US, a legalized market still “in its infancy.” In contrast to other countries, the industry’s physical footprint is negligible, with a very low count of physical gambling retail locations.This, along with “ubiquitous access to the internet, and sophisticated mobile apps,” leads the analyst to believe “the US gambling market is going to be significantly more remote relative to more established markets.”Data backs up McTernan’s theory. For example, according to DKNG’s Analyst Day presentation, online gambling revenue across the globe accounted for only 12% of total industry revenue in 2019. The figure has risen to 40% in the UK, but even that pales in comparison to the US’s primary established sports betting market, New Jersey, where 90% of revenue is generated online.“We believe NJ is emblematic of how the relative market shares of online vs physical locations will play out,” McTernan added.Further down the line, McTernan considers DKNG’s global opportunity. The analyst believes there is potential for DraftKings to penetrate established markets “with an aim of becoming the Spotify of online gambling.”Accordingly, McTernan rates DKNG a Buy along with a $60 price target. This conveys the analyst’s belief shares could appreciate by a hefty 80% over the coming months. (To watch McTernan’s track record, click here)Other analysts are bullish, too. DKNG's Strong Buy consensus rating is based on 1 Hold vs. a resounding 9 Buys. Meanwhile the $46.67 price target implies nearly 40% upside from current levels. (See DraftKings stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
- Business Wire
DraftKings Extends Deal with Stats Perform to Boost Daily Fantasy Sports Experience
Today, Stats Perform, the SportsTech leader in data and AI technology, announced a multi-year extension with the digital sports entertainment and gaming provider DraftKings Inc. (Nasdaq: DKNG). The deal provides DraftKings access to Stats Perform’s unparalleled sports data feeds for use in its daily fantasy sports (DFS) contests and DK Live, the company’s play-by-play fantasy app.
- InvestorPlace
Don’t Bet on Penn National Gaming Stock Until Casinos Start to Level Out
Penn National Gaming (NASDAQ:PENN) is a small casino operator with big ambitions in online gaming. The ambitions are reflected in its 36% stake in Barstool Sports, a sports blog building a sports betting app. What John Maynard Keynes described as the market's "animal spirits" are reflected today in PENN stock.Source: Casimiro PT / Shutterstock.com In 2020, when people are feeling good about the economy, they pile into Penn National stock.In February it peaked at $39/share, and nearly hit that level again in early June. When people are feeling down, they sell Penn National. The shares have traded below $7 this year and have suffered two down moves of over 10% just this month.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPenn National is the ultimate "Dirty Harry" stock. Feeling lucky, punk? The Bull Case for PENN StockWhat the bulls see in Penn National is its potential sustained by cash flow.Penn National has brought in $5.1 billion of revenue in the last year and had $1.1 billion in the March quarter. It's only nominally profitable but generated $843 million of operating cash flow in 2019. * 10 Consumer Stocks to Buy to Ride the Post-Covid-19 Wave Penn National spent $450 million for a 36% share of Barstool in January. Barstool founder Dave Portnoy has since been all over TV like a wrestling promoter, talking up a rivalry with DraftKings (NASDAQ:DKNG) and Flutter Entertainment (OTCMKTS:PDYPY). Many of Flutter's betting parlors go by the name Paddy Power.Portnoy acts like online sports betting is a huge business in the U.S. The fact is it's only legal in 7 states and not all are operating. Most states that allow sports bets only do it in casinos. Regulation is a patchwork, but bulls expect a flurry of legislation next year, as states try to patch holes in their budgets created by COVID-19.Penn National started with horse racetracks (where you sit down right on the horse). It began buying casinos, mainly in the south, 20 years ago. Its best known property is Las Vegas' Tropicana but it has 38 in all, most with names like Hollywood Casino, Boomtown and Ameristar. The Bear Case Against Penn NationalBears see a small casino operator punching above its weight.Penn National's market cap today is about equal to its 2019 revenue. MGM Resorts (NYSE:MGM), by contrast, sells for just two-thirds of its 2019 revenue. Penn National's premium valuation is based on the sports book.DraftKings has a market cap of $13.25 billion, about 40 times its 2019 revenue. It also has a scaled technology partner to operate sports betting. Flutter, which operates in Europe, has one too. Flutter has a market cap of about $21.7 billion, twice that of DraftKings, with 2019 revenue of $2.1 billion.Penn National's online action is being handled by Kambi, a European operator owned by Unibet, a Swedish company worth about $1.2 billion. It has arrangements with DraftKings as well.It's the size and profitability of the U.S. online sportsbook, and Penn National's ability to gain market share in it, that worries the bears. Penn National has been reopening its casinos aggressively, and COVID-19 has responded by spreading aggressively. Penn National's near-term fate is tied up in the casinos, as our Thomas Niel notes. The sports book is all speculation. The Bottom LineWhen times are good and money flowing, casinos can be a cheap night out.But times are not good right now, and money is not flowing. Penn National's re-opening efforts look doomed to fail as COVID-19 cases continue to spike.The sports betting bonanza may not be as big as Penn is playing it, either. Flutter is scaled and active, but only does $2 billion in business a year. That's less than half of Penn's handle in its casinos.Even if you want to be in Penn National, you might want to wait a few weeks and see how bad the latest outbreak is. Let the virus be your guide, and don't get in until you see it receding.Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Don't Bet on Penn National Gaming Stock Until Casinos Start to Level Out appeared first on InvestorPlace.
- SmarterAnalyst
Insiders Sell $596M Of DraftKings Stock, Taking Advantage of 230% Rally
Shares in sports betting company DraftKings (DKNG) have exploded by an incredible 237% since its Nasdaq debut in April. So it’s perhaps not surprising that insiders have taken advantage of this rally as quickly as possible. Although the extent to which the stock has been offloaded is still eyebrow-raising- with a whopping $596 million-worth of shares sold on June 23, according to a June 25 filing.Most notably, co-founder Paul Liberman has just sold $31 million worth of DKNG stock, leaving him with a $15 million holding. Robins Jason sold $70 million of DraftKings stock, while director Hany Nada sold off $37 million. Director Steven Joseph Murray made a $40 million share sale, with directors Shalom Meckenzie and John Salter each selling shares worth over $125 million. SBTech founder Meckenzie still owns over $1 billion in DKNG stock following the transaction- giving him a holding of over 10% in the company.On June 17 Oppenheimer analyst Jed Kelly reiterated his buy rating on the stock with a $48 price target (33% upside potential). According to Kelly, DKNG is taking advantage of favorable market conditions to shore up its balance sheet ahead of more states regulating OSB/ iGaming.He currently forecasts DKNG spending ~$876M on sales and marketing over the next three years, which means the company could be looking at potential acquisition/ investment opportunities. This could be in a media partnership similar to PENN/Barstool or opportunities in emerging products such as eSports.“We believe upside is being driven by higher iGaming revenue and pentup demand for sports betting as live events (UFC/NASCAR/golf) gradually return” the analyst wrote.Meanwhile Rosenblatt analyst Bernie McTernan has just initiated coverage with a buy rating and bullish $60 price target (66% upside potential).The analyst stated, “As the gambling industry in the US is emerging we believe online players will take the dominant share and DKNG should be a leader.”He believes near-term catalysts to own the stock now are the return of live sports and the potential acceleration of gambling legislation from COVID-19. “In our bull case, we believe the stock can triple” McTernan concludes.Overall, DraftKings scores 9 Buy ratings versus 1 Hold rating adding up to a Strong Buy analyst consensus. The $47 average price target implies 29% upside potential in the shares over the coming year. (See DraftKings stock analysis on TipRanks).Related News: Apple Buys Device Management Startup Fleetsmith Slack Seeks To Replace E-mail With Launch Of Virtual Business Platform Microsoft’s Xbox Closes Mixer Live Streaming, Partners With Facebook Gaming More recent articles from Smarter Analyst: * The Rise of E-Commerce and Cloud Services Positions Amazon (AMZN) for the Win * Facebook Faces More Ad Boycotts, But This Analyst Expects Minimal Impact * 3 "Strong Buy" Penny Stocks With Explosive Upside Ahead * Heron Therapeutics: HTX-011 Will Eventually Be Approved, Says Analyst
- IPO-Edge.com
Replay: IPO Summit Webinar with Sidley, Nasdaq, MorganFranklin, ICR
IPO Edge hosted virtual IPO Summit to discuss a number of timely topics ranging from corporate governance to the upcoming election season that issuers may need to consider. A replay of the approximately 90-minute event will be can be accessed here. The webcast, hosted in partnership with Sidley Austin LLP, MorganFranklin Consulting, Nasdaq, ICR, and The Palm Beach Hedge Fund Association, included […]
- GlobeNewswire
Digital Transformation of Sports, Gaming, and Entertainment: CEOs of Penn National Gaming (NASDAQ:PENN), ImagineAR (OTC: IPNFF) and DraftKings (NASDAQ:DKNG) Discuss Today’s New Growth Opportunities
Wall Street Reporter, the trusted name in financial news since 1843, has published reports on the latest comments and insights from leaders at Penn National Gaming, Inc. (NASDAQ:PENN), ImagineAR (IPNFF) (CSE:IP), and DraftKings Inc. (NASDAQ:DKNG). Accelerating Digital Transformation is creating new opportunities in the casino and sports betting, and digital gaming business.
- IPO-Edge.com
IPO Edge to Host IPO Summit Webinar TODAY at 12 EST
Virtual Event Participants include Sidley Austin LLP, MorganFranklin Consulting, Nasdaq, and ICR As the capital markets gradually recover and companies begin planning for initial public offerings, IPO Edge will host a virtual IPO Summit to discuss a number of timely topics to help corporate issuers prepare. The approximately 90-minute event will be on Thursday, June […]
- TipRanks
2 Stocks Flashing Signs of Strong Insider Buying
After a string of gains since June 12, markets are taking a turn down today. The slip, over 2.5% on both the S&P 500 and the Dow Jones, comes after Florida confirmed more than 5,500 new coronavirus cases. The sudden spike raised new fears that the still-fragile economic reopening may be derailed. The mood wasn’t helped by orders from the states of New York, New Jersey, and Connecticut – which had all been hard-hit by the virus – that all visitors from known hot spots must self-quarantine for 14 days.In times like this, it’s a comfort for investors to follow a reliable trading signal. Corporate officers, who are privy to the inside information on their companies, have an obligation to serve the best interests of their shareholders, and are held responsible for their actions, don’t jump lightly when it comes to trading. That duty and accountability, and the legal requirement to disclose all trades in the companies they serve, makes following corporate officers – the insiders, if you will – a common strategy for investors.TipRanks has the data and the tools to unwind the insiders’ actions. The Insiders’ Hot Stocks tool highlights the equities that corporate insiders are moving on. We’ve picked two stocks that show signs of informative buys, purchases that are more extensive than ordinary. Let’s look at the details.Magnolia Oil & Gas (MGY)We will start with Magnolia, a small-cap oil and gas exploration and production company based in Texas’ Eagle Ford formation. Eagle Ford is part of the rich petroleum region which has propelled Texas to the forefront of the North American hydrocarbon industry.Magnolia’s production beat estimates in Q1, reaching 68.4 thousand barrels of oil equivalent per day. If that total, 55% was crude oil. Weakness in oil prices hurt Magnolia during the quarter, and forced a net loss of 11 cents per share. MGY stock performance was followed the earnings, and the company’s shares are still down 35% since February.Company CEO Steve Chazen cast a vote of confidence this week when he spend almost $300,000 buying up a bloc of 50,000 shares in MGY. Chazen has been making periodic purchases of Magnolia shares for the last two years.Covering this stock for MKM Partners, analyst John Gerdes is also optimistic about Magnolia. He looks at forward production estimates, and sees the company generating plenty of cash: “Assuming ~$260 million in capital expenditures this year, Magnolia should generate ~$50 million of FCF in 2020 assuming NYMEX ~$33 oil/~$2.10 gas. Assuming approximately $250 million in capital spending next year and NYMEX $45 oil/$2.65 gas, the company should generate ~$130 million of FCF in 2021…”Gerdes uses his FCF assumptions to justify a Buy rating and a $7 price target, which implies a 25% one-year upside. (To watch Gerdes’ track record, click here)Magnolia shares are priced at just $5.59, and the average price target of $6.38 suggests it has room for 14% upside growth in the next 12 months. MGY's Moderate Buy consensus rating includes 6 Buys and 3 Holds set in the last month. (See Magnolia stock analysis on TipRanks)Groupon, Inc. (GRPN)At first glance, e-commerce innovator Groupon should have weathered the coronavirus storm better than it did. Shares are still far down from February’s trading levels, and first quarter earnings turned sharply negative after holding at or near break-even through 2018 and most of 2019. Q4 2019 saw strong profitability; that ended abruptly in Q1 2020.On a positive note, the EPS loss was far narrower than had been feared. The company finished Q1 with a strong cash position, too, having some $667 million on hand. That total includes $150 million borrowed from a revolving credit facility.But the big news for GRPN stock comes from company chair and co-founder Eric Lefkofsky. He bought up 250,000 shares, spending $5.39 million to add that to his already extensive holdings. Lefkofsky’s move signaled that GRPN is worth buying – especially because his declared purchase price was over $21 per share. GRPN was trading for less than that when Lefkofsky made his buy, and it is still trading for less today. This gives investors a rare chance to snap up common stock for less than the price paid by the best-informed insiders.Wedbush’s 5-star analyst Ygal Arounian sums up the cautious Wall Street consensus on this stock. He sees some strong opportunities for the company in the near future, writing, “One area of potential upside for Groupon is in Goods, where the company noted that it is seeing traction in recalibrating its assortment towards areas like first aid, face masks, and more recently, outdoor furniture/gardening… the overall buoyancy in ecommerce should provide tailwinds…”However, he also notes that the company’s large outdoor events segment has been derailed by COVID-19, and efforts to adapt are facing the distinct possibility of a coronavirus resurgence. Arounian remains neutral here, placing a Hold on the stock with a $22 price target. His target suggests a 11% upside potential. (To watch Arounian’s track record, click here)The conventional wisdom on GRPN shares is to Hold. This analyst consensus rating is based on 4 Holds and 1 Sell sent in recent weeks, along with 2 Buys. The stock is selling for $19.89, but the average price target is bullish. At $25.71, it suggests a strong 29% upside potential in the year to come. (See Groupon stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
- GlobeNewswire
DraftKings Launches Mobile Casino App in New Jersey
DraftKings (DKNG:NASDAQ) announced today the launch of its standalone Casino app in New Jersey. Similarly to its Daily Fantasy and Sportsbook offerings, DraftKings leveraged its in-house technology to develop the DraftKings Casino app and create a more holistic product suite and dynamic gaming experience. The app will feature new games only found on DraftKings, plus revamped classics, including Blackjack and Roulette.
- Investopedia
DraftKings Stock Near All-Time High on Momentum Rally
DraftKings stock is trading near an all-time high, but reopening professional and college sports in 2020 will be a tough chore.
- Barrons.com
Apple Up 2.6% Amid Chip Announcement, and Two More Numbers to Know
Blank-check companies are on pace to smash last year’s record for IPOs. Gold futures are the highest they have been since 2012. And Apple gets into the computer chip game.
- Barrons.com
Nikola and DraftKings Stock Started as ‘SPACs.’ What Investors Need to Know.
Buying into special-purpose acquisition companies can pay off. Just ask SPAC investors who ended up with Nikola, DraftKings, or Virgin Galactic.
- Yahoo Finance Video
DraftKings sees strong demand in new shares offering
Yahoo Finance’s Emily McCormick joins Melody Hahm to break down the details of DraftKings common stock offering, and more.
- InvestorPlace
The Rally in DraftKings Stock Is Too Strong
How sweet is a 300% rally? DraftKings (NASDAQ:DKNG) investors just got that gift in a flash. The quarantine jump-started it like with a giant shot of adrenaline. After a small dip, DraftKings stock tripled in just two months, and the success should be long term.Source: Lori Butcher/Shutterstock.com But that's why investors should exercise a little patience and find better entry points. This comment will likely upset a few fans, but my concern is with the stock's price action, not the company itself.The concept is great and the bullish thesis is 100% viable. The company operates in one of the hottest concepts of late. Gaming and esports have incredible momentum, and gambling will never fall out of favor. Add to it that they are domestic and online and it's a formula for sure success for years to come. The world is now on an ultra fast pace to digitize thanks to the novel coronavirus crisis.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMy caution here comes from the speed and slope with which the stock rallied. This does happen, but I've never seen it stick to where there are no give-backs. The bulls should ask for corrections because that's how they build better bases above the ones below. Otherwise, the rise of DraftKings stock would become too frothy and very fragile. Any small hiccup thereafter would cause a massive breakdown rather than a normal correction along the way. The Rally in DraftKings Stock Is Too StrongThere is no doubt that rising too fast has negative effects down the line. This is not the same as a suggesting to short the stock. Investors should admit that DraftKings is too hot to short, but it's also too high to chase. It is okay to miss a rally because there will always other entry points. There are thousands of other tickers to trade on Wall Street, so we're not forced to use only ones that are too hot.While the quarantine and the global shut down completely demolished all crowd-economy companies like the physical casinos and hotels, it benefited others tremendously. DraftKings for example is reaping the rewards from the woes of the others. The in-person entertainment sectors are severely limited, and alternatives like this are booming. This is their moment to shine and the important bit is that a lot of these will become new habits. This trend will not be a fad and much of the new usage will stick going forward. The fear of disease is fuel to sustain its growth, even after all the businesses reopen. * 10 Robotics Stocks on the Technological Cutting Edge More to that point, the normalizing process is going to be long and arduous. We are nowhere near having a vaccine in spite of all the sporadic updates of progress. In fact, we are not even guaranteed to have one at all because this has never happened for any coronavirus before. They say this time is different, so I'll take them at their word. Growth Doesn't Come Cheap So Patience Is a VirtueSource: Charts by TradingView Fundamentally, DraftKings stock is definitely not cheap. But this is the growth phase, so value is not a concern at this point. During the developmental phase investors need to see past the current situation. Therefore, it is best to get help from the only truth and that is its actual stock price.The short-term price action of DraftKings is tightening. The range is now stuck between $35 and $43 per share. A breach of either of those edges will carry momentum in that direction. If the bulls are able to beat the prior high, they will overshoot another $10 higher. Conversely, if the bears break through the last support they could retest $28 per share or lower. Until either of those two happen, there's nothing to do with the stock. From a trading perspective it's better to let them fight it out until one side wins and then you join the consequent rally up or down. This morning, the stock is under pressure perhaps because of the new share offering they are doing. It's OK to Trade a Stock While It MaturesFor those not interested in trading and are instead looking for a longer time horizon, the decision is easy. They either plug their nose and buy the stock now, knowing that they're going to hold it through dips and peaks. Or they can wait it out, and pounce on the next sizable dip. In either case, it is always smart to take the position in tranches. The stock markets are at all-time highs and that's never a great place to load up fully on positions in any stock. Taking partial positions leaves room to manage the open risk by adding more lower.The debate in the media about the shape of the recovery is misleading and incomplete. Experts present their arguments for or against a V-shape recovery. Very few actually make the distinction that the stock market has already recovered in a "V" from the Covid-19 crisis. In fact, the Nasdaq has already risen higher than ever before. But the other part is that the economy is nowhere near recovering and that shape will definitely not be anything near a "V."It's important for investors to know what idea they are chasing to avoid mistakes. And this is more likely to happen at the tops after long rallies than any other point in time. This is one of those times. Consequently, all I am suggesting today is to exercise a little patience before loading up the truck with DraftKings stock.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post The Rally in DraftKings Stock Is Too Strong appeared first on InvestorPlace.
- InvestorPlace
The Rally in Penn National Stock Needs to Reverse
Somewhat incredibly, Penn National Gaming (NASDAQ:PENN) shares have rallied some 29% so far in 2020. Despite a pandemic that has ravaged its business, Penn stock has added about $850 million in equity value through the first five and a half months of the year.Source: Casimiro PT / Shutterstock.com Unsurprisingly, PENN stock is the exception as far as the sector goes. Most casino operators have seen their shares fall sharply year-to-date. The novel coronavirus shut down the industry for much of the second quarter. Capacity limits and nervous customers will pressure results in the second half of the year and potentially beyond.Yet PENN has rallied. The reason why is simple: a potentially transformative acquisition that closed in February. Investors loved the deal at the time, and clearly they still do.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI worry, however, that they love it a little too much. Hopes for sports betting have driven up multiple stocks - but by definition not every operator is going to win in that market. Even those that do may not see quite the explosive growth that some believe. And in the meantime, investors are ignoring very real risks in the business that drives all of Penn's profit right now. * 10 Robotics Stocks on the Technological Cutting EdgeAdmittedly, PENN stock at March lows below $5 was ridiculously cheap. Back at around $33, however, the rally at best seems to have run its course. The Barstool DealClearly, what's driving the optimism in PENN stock is the company's acquisition of a stake in Barstool Sports. Barstool will underpin Penn's branding in sports betting, while its enormous audience should provide an easily accessible base of potential customers.The market loved the acquisition. Penn shares spiked on the news, and kept gaining to a new all-time high. And there are reasons for optimism.After all, sports betting is going to be a big business in the U.S. And it's possible from a long-term perspective that the Covid-19 pandemic proves to be a positive for the market. State-level legalization is required, and more states may be more willing to contemplate legalized sports betting as a way to fix budget holes caused by the pandemic response.The Barstool deal sets up Penn to be a potential leader in that key market. It also allows for cross-selling of online gambling products, where the company has had early success in Pennsylvania.So the deal suggests some value in PENN stock. The question is if an acquisition that cost $163 million, and valued Barstool as a whole at less than $500 million, supports what looks like over $1 billion in outperformance so far in 2020. Challenges in the Legacy BusinessAfter all, shares of other regional casino operators have gone in the wrong direction so far this year. Boyd Gaming (NYSE:BYD) is down 26%. Eldorado Resorts (NASDAQ:ERI) has fallen 31%. The news for Macau-heavy casinos is just as bad, as Las Vegas Sands (NYSE:LVS) has declined 28% and Wynn Resorts (NASDAQ:WYNN) 35%.Across the sector, the market is pricing in significant pressure on land-based casino operators. The impact of closures in March alone cost the industry as a whole billions of dollars. Interest rates, and expense, presumably rise going forward as bond markets price in higher risk.There's the possibility of a macroeconomic impact on visitation and spend. Older customers - the core of any casino's slot business, which provides higher margins than table games - may stay nervous about visiting brick-and-mortar properties for years to come.Penn National is not immune to these challenges. And it's worth remembering that in a negative environment for the sector, PENN stock should underperform, not outperform. Including the leases owned primarily by Gaming & Leisure Properties (NASDAQ:GLPI), a real estate investment trust Penn spun out in 2012, the company has nearly $11 billion in debt. Relative to earnings, it's the most leveraged player in the space at the moment.The optimism toward the Barstool deal ignores all of those challenges. It's still the legacy brick-and-mortar business that is the most important business - and that will be the case going forward as well. That business should have a lower valuation, not a higher one. Yet, again, PENN has added $850 million in market value so far this year. Sports Betting and PENN StockPENN stock has added at least $1 billion in value simply due to investors revaluing its sports betting opportunity post-Barstool. And to some investors, I can see why that makes sense.After all, DraftKings (NASDAQ:DKNG) has a market capitalization pushing $13 billion. Flutter Entertainment (OTCMKTS:PDYPY) stock has marched steadily higher on hopes for its FanDuel unit. And there's one other regional casino operator whose shares have risen in 2020 (if modestly so): Churchill Downs (NASDAQ:CHDN), which can leverage its existing TwinSpires online horse racing platform to acquire customers and provide the technology for sports betting nationwide.But that paragraph alone shows part of the problem here: every stock is rising. The same is true for suppliers, most notably Gan (NASDAQ:GAN), which has rallied more than 700% in a matter of months.These companies can't all win. U.S. sports betting will largely be a zero-sum game. Gains at one operator will be losses for another. Supplier profits come out of casino revenues.Meanwhile, it's far from guaranteed that sports betting will be that big a market. Major states including New York and California remain on the sidelines, and politically dysfunctional enough to see debates last for years on end. Online sports betting has only been legalized in a handful of states; in-person betting is not nearly as profitable.More broadly, sports betting is a much smaller market than casino gambling. It's not a 24/7 pastime. Outside of football, betting demand remains relatively thin. Yet investors in PENN are focusing on the smaller opportunity - and ignoring the bigger problem. If and when that changes, the rally in Penn National stock will be over.Vince Martin has covered the financial industry for close to a decade for InvestorPlace.com and other outlets. He has no positions in any securities mentioned. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post The Rally in Penn National Stock Needs to Reverse appeared first on InvestorPlace.
- SmarterAnalyst
DraftKings Reveals Pricing, Upsizing of $1.6B Public Offering
Shares in DraftKings (DKNG) rose 2% in Thursday’s after-hours trading after the sports betting company announced the upsize and pricing of its underwritten public offering of 40 million shares of Class A common stock.DraftKings will sell 16 million shares and certain selling stockholders of DraftKings will sell 24 million shares, at a public offering price of $40 per share for a total offering size of $1.6 billion. The selling stockholders have also granted the underwriters a 30-day option to purchase up to 6 million additional shares.The offering was upsized from the previously announced offering size of 33 million shares. DraftKings says it intends to use the net proceeds from the offering for general corporate purposes. The company will not receive any proceeds from the stockholder share sale.On June 17 Oppenheimer analyst Jed Kelly reiterated his buy rating on the stock with a $48 price target (18% upside potential). According to Kelly, DKNG is taking advantage of favorable market conditions to shore up its balance sheet ahead of more states regulating OSB/ iGaming. Indeed, shares have exploded by an incredible 282% since its Nasdaq debut in April.He currently forecasts DKNG spending ~$876M on sales and marketing over the next three years, which means the company could be looking at potential acquisition/ investment opportunities. This could be in a media partnership similar to PENN/Barstool or opportunities in emerging products such as eSports.“We believe upside is being driven by higher iGaming revenue and pentup demand for sports betting as live events (UFC/NASCAR/golf) gradually return” the analyst wrote.The stock scores 7 Buy ratings versus 1 Hold rating adding up to a Strong Buy analyst consensus. The $43.29 average price target implies 6% upside potential in the shares over the coming year. (See DraftKings stock analysis on TipRanks).Related News: Google’s $2.1 Billion Fitbit Bid Challenged By Australia’s Competition Regulator Facebook Files Lawsuits In U.S., Europe Against Abuse On Its Platforms Carnival Posts $4.4B Quarterly Loss Sending Shares Down 7% In Pre-Market More recent articles from Smarter Analyst: * The Rise of E-Commerce and Cloud Services Positions Amazon (AMZN) for the Win * Facebook Faces More Ad Boycotts, But This Analyst Expects Minimal Impact * 3 "Strong Buy" Penny Stocks With Explosive Upside Ahead * Heron Therapeutics: HTX-011 Will Eventually Be Approved, Says Analyst
- GlobeNewswire
DraftKings Announces Upsize and Pricing of Public Offering of Class A Common Stock
DraftKings will sell 16 million shares of its Class A common stock and certain selling stockholders of DraftKings will sell 24 million shares of Class A common stock, at a public offering price of $40.00 per share for a total offering size of $1.6 billion. The Offering was upsized from the previously announced offering size of 33 million shares of Class A common stock.
- Barrons.com
A $315 Million Loss for U.S. Steel, and Two More Numbers to Know
Housing starts report slower growth than expected. U.S. Steel stock plummets 10% amid second-quarter losses. But DraftKings could get a royal reception with a sale of new stock.
- Yahoo Finance Video
DraftKings issuing more stock after strong public debut
Yahoo Finance’s Emily McCormick joins Melody Hahm to discuss DraftKings' latest move to sell more shares amid the company's strong stock performance.
