{"id":134048,"date":"2020-04-25T04:00:37","date_gmt":"2020-04-25T11:00:37","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=134048"},"modified":"2020-04-26T10:35:36","modified_gmt":"2020-04-26T17:35:36","slug":"draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/","title":{"rendered":"DraftKings Soars in NASDAQ Debut, Closes Below Opening Print as Investors See Long Road to Profitability"},"content":{"rendered":"

DraftKings (NASDAQ:DKNG) jumped 10.38 percent in its first day as a public company on Friday. But the newly minted stock closed below its opening print, as some investors ponder how long it’ll take for the sportsbook operator to turn a profit.<\/p>\n

\"DraftKings
DraftKings is now a public company, but investors believe profitability will take some time. (Image: Wall Street Journal)<\/figcaption><\/figure>\n

On volume of 11.47 million shares, DraftKings closed at $19.35 after opening at $20.49 and trading as high as $20.75, according to Bloomberg data. That closing price is almost 10.4 percent higher than the final print of Diamond Eagle Acquisition Corp., the special purpose acquisition company (SPAC) used in a reverse merger to aid DraftKings in becoming a publicly traded firm. The stock rose almost four percent in Friday’s after-hours session.<\/p>\n

Some market observers believe it’ll be some time before the daily fantasy sports (DFS) juggernaut turns a profit, a relevant concern as the company’s losses are increasing.<\/a><\/p>\n

The closing of the SPAC transaction and ensuing NASDAQ listing is an important milestone for DraftKings,\u201d said Roundhill Investments CEO and co-founder Will Hershey in remarks emailed to Casino.org.<\/i> \u201cWhile profitability remains a ways off, being a public company will provide critical access to the public markets.\u201d<\/p><\/blockquote>\n

Hershey didn’t estimate when DraftKings will stop losing money. The company posted a 2019 loss of $143 million, although revenue jumped 43 percent.<\/strong><\/p>\n

Important for Other Reasons<\/h2>\n

In the hyper-competitive sports betting landscape, where margins are slim for brick-and-mortar sportsbook operators, online operators<\/a>, including DraftKings, face considerable costs when it comes to luring and retaining customers. As a public company, DraftKings has new avenues for raising capital, should it need to.<\/p>\n

\u201cThe online sports betting and gaming market is all about customer acquisition right now, and that will require meaningful amounts of capital,\u201d said Hershey.<\/p>\n

\n

Speaking of customers, with no traditional sports available<\/a> to DFS players and gamblers at the moment because of the COVID-19 pandemic, some market observers viewed DraftKings NASDAQ debut as poorly timed. However, the company is getting a jolt from the NFL Draft.<\/p>\n<\/div>\n

Round one of the 2020 draft was Thursday night, and DraftKings CEO Jason Robins told CNBC <\/i>it \u201cwas a really big betting event relative to prior years,\u201d indicating there’s pent-up demand for regular sports schedules to return.<\/p>\n

Another Issue to Consider<\/h2>\n

As Casino.org <\/i>reported on Thursday<\/a>, an overlooked issue with the DraftKings initial public offering (IPO) is that the company debuted with multiple share classes, ensuring the vast majority of the entity’s voting rights are controlled by a small number of investors, potentially raising corporate governance issues.<\/p>\n

That much was confirmed with a Form S-1 filing with the Securities and Exchange (SEC), indicating DraftKings co-founder Jason Robins will control 92.7 percent of the company’s voting shares. A group of just 15 shareholders own 94.7 percent of the sportsbook operator’s voting rights.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

DraftKings (NASDAQ:DKNG) jumped 10.38 percent in its first day as a public company on Friday. But the newly minted stock closed below its opening print, as some investors ponder how long it’ll take for the sportsbook operator to turn a profit. On volume of 11.47 million shares, DraftKings closed at $19.35 after opening at $20.49 […]<\/p>\n","protected":false},"author":46,"featured_media":134051,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1074],"tags":[],"acf":[],"yoast_head":"\nDraftKings Soared in Day One of Trading, But Profitability Is a Way Off<\/title>\n<meta name=\"description\" content=\"DraftKings rallied on its first day as a pubic company, but some investors see its roady to profitability as a long way off.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DraftKings Soared in Day One of Trading, But Profitability Is a Way Off\" \/>\n<meta property=\"og:description\" content=\"DraftKings rallied on its first day as a pubic company, but some investors see its roady to profitability as a long way off.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-04-25T11:00:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-04-26T17:35:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/dkng-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"3500\" \/>\n\t<meta property=\"og:image:height\" content=\"2334\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/\",\"url\":\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/\",\"name\":\"DraftKings Soared in Day One of Trading, But Profitability Is a Way Off\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/dkng-scaled.jpg\",\"datePublished\":\"2020-04-25T11:00:37+00:00\",\"dateModified\":\"2020-04-26T17:35:36+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"DraftKings rallied on its first day as a pubic company, but some investors see its roady to profitability as a long way off.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-soared-in-day-one-of-trading-but-profitability-is-a-way-off\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/dkng-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/04\/dkng-scaled.jpg\",\"width\":3500,\"height\":2334,\"caption\":\"DraftKings is now a public company, but investors believe profitability will take some time. 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