Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0778
    -0.0015 (-0.14%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2621
    -0.0001 (-0.01%)
     
  • USD/JPY

    151.3320
    -0.0400 (-0.03%)
     
  • Bitcoin USD

    70,319.87
    +479.03 (+0.69%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,343.58
    +175.51 (+0.44%)
     

DraftKings shares skyrocket as NBA legend Michael Jordan takes equity stake

Michael Jordan is now a special advisor on the board of DraftKings. Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Dan Roberts discuss.

Video Transcript

ALEXIS CHRISTOFOROUS: DraftKings, which we just mentioned a second ago, bringing an NBA legend on to the team. Michael Jordan is now a special advisor to the board of DraftKings. He's gonna take an equity stake in the company in exchange for helping them out.

Investors appear to be loving the deal because shares of DraftKings higher here in the premarket. Dan Roberts joins us for this one. So good morning, Dan. Is this a surprise? Or did you know this was in the works to have Jordan join the team?

DAN ROBERTS: Good morning, Alexis. No. It's a surprise. And in fact, you know, I know the people at the company closely, write about the company a lot. I think this was really kept under wraps.

No one knew about this ahead of time. I'm sure that they were trying to get it done. And then as soon as it was done, and set, and secure, I'm sure that they wanted to get that news out.

As you mentioned, the stock up almost 13% premarket. People like it. The timing here makes a lot of sense too. I mean, we've got the NBA playoffs going on. He's obviously a legend in basketball.

But also, I think it's sort of non-controversial to say this, but Michael Jordan, known to like betting. He is a gambler. Loves to gamble.

And of course, when "The Last Dance" came out, that ESPN documentary about him, that was part of something they touched on. And whether that was an issue for him, you know, he said it wasn't. He said, yep, you know, I like to gamble.

So I think it kind of make sense. It's a perfect fit for them. It would have been one thing if they just used him in a series of ads. They've used a lot of celebrity spokespeople.

But having him as an advisor to the board, then it makes more sense why the stock is up. He's got more of a relationship with the company. He's not joining the board, but an advisor to the board. And of course, as you mentioned, he gets an equity stake. They haven't said this, but I wonder how many shares he gets.

BRIAN SOZZI: And what could the impact be for DraftKings? And let's look at our Papa John's, a company you and I have covered closely here. Shaq is-- is actually on that board. I haven't seen much from Papa John's and Shaq, maybe a new commercial, a new pizza. But how could Jordan influence DraftKings?

DAN ROBERTS: Well, I would disagree with you, Sozzi, on Papa John's. I think Shaq has already been huge for them. And I'm glad you mentioned that.

I mean, he's more than just a spokesperson for them. He's actually on their board. He also bought nine Papa John's franchises.

And obviously, this is a little different for now. But I think that it could be the first step. And later on, if MJ were to actually join their board, or if they were to start using it in ads, as I mentioned, then you really would see a little bit of a rebranding.

I mean, Papa John's basically made Shaq the face of the company and the face of the brand. That's not what's happening with DraftKings yet. And DraftKings doesn't need that.

You know, the stock, which-- which was brought public via SPAC in April, has done extremely well. What was really interesting was how much it surged even when there were no live sports. So now this just continues the momentum.

So they don't really need a rebrand right now. But if they were to need that, I think you could see MJ become pivotal. Just his imprimatur, I think, will matter for the company.

And as we see, shareholders like it. But I won't be surprised at all if there's a new ad campaign soon enough with MJ. Although, this would have been the time to-- to do that ahead of time, the NBA Playoffs.

ALEXIS CHRISTOFOROUS: But, Dan, let me ask this. Do you think there is a conflict of interest here? Because I know that Jordan is still affiliated with the Hornets.

DAN ROBERTS: So it's interesting. The NBA, and the NFL, and those other leagues, in some cases, the leagues have an official deal with DraftKings at the league level. And actually, that's what the NFL has.

But the NBA has a league deal with FanDuel, but they also let individual teams make their own marketing deals and advertising deals with one or the other. They don't bar teams from doing so just because there's a deal at the league level. And so, you know, the Hornets are free to just do whatever they want with DraftKings. I don't think there's a conflict there.

Of course, later on, there could be a conflict if there's sort of a betting issue. But this isn't the same as a current player linking up with these companies. So, you know, I don't see an issue there.

You might see a little bit of an optics thing. Some people might not like it. But as we know in our interest at Yahoo Finance, shareholders like it right now.

ALEXIS CHRISTOFOROUS: Yeah. I think you're right. Might look a little shady to some. All right. Thanks a lot, Dan.

Advertisement