- DraftKings’ stock price has soared by 140 percent since going public on April 24
- DraftKings is now estimated to be worth $13 billion, which makes it more valuable than MGM, Caesars, and other casino industry leaders
- DK’s soaring performance a result of optimism for sports returning in summer
Back in April, DraftKings decided to go public. The sports betting and daily fantasy sports site was officially listed on the New York Stock Exchange starting on April 24. Those that took chances on the company’s stock have been rewarded in a big way early on.
According to CNN, shares of DraftKings’ stock have risen by almost 140 percent since going public. The decision to start trading on Wall Street came shortly after DraftKings completed a reverse merger worth $3.3 billion with a special-purpose acquisition company.
Optimism For Summer
The soaring stock price comes despite the fact that all major team sports leagues are still shut down in the United States. However, the rising prices are coming largely as a result of optimism surrounding the potential for those leagues to resume play at some point this summer.
DraftKings’ stock dipped a bit on Tuesday, but that came on the heels of a six-day winning streak during which shares spiked by over 50 percent.
DraftKings is now valued at over $13 billion, which means the company is currently more valuable than noteworthy casino industry stalwarts like Caesars Entertainment, Wynn Resorts, and MGM Resorts.
Sales jumped by around 30 percent in the first quarter with bettors placing bets on fringe sports like Russian table tennis and professional e-sports. With leagues like the NBA and NHL halting their seasons, DraftKings has moved to expand its offerings in states that offer legal online sports betting. DraftKings is offering online blackjack and roulette in addition to other casino games.
Many Pro Sports Restarting Play Soon
While the stock price continues to rise, the company is optimistic that this is only the beginning. On Thursday, the NBA is expected to formally ratify a plan to restart its season in late-July. That will be over four months after the league halted operations on March 11.
The NHL is going to return with a bold 24-team playoff format at some point over the summer, too, but the exact dates and venues for playoff hockey have yet to be determined. Major League Baseball has been trying to hammer out a deal with its players for a return to action in early-July, but those negotiations have reportedly stalled out.
Major League Soccer, which halted its season one day after the NBA did, announced Wednesday that the league and players have agreed on a new collective bargaining agreement that will run until 2025. The deal means MLS’ 2020 season will likely relaunch in July, as well.
American team sports are on the verge of coming back, but a number of individual sports have already done so. NASCAR and the UFC restarted following their own delays last month, while the PGA Tour is scheduled to return to action on June 11.
The top soccer league in Germany restarted on May 16, and top leagues in England, Spain, and Italy will do the same later this month.
DraftKings announced last week that it has come to terms on a new partnership with Sportradar, a data company. The deal will allow DraftKings users with an account balance above $0 to watch live games directly on the DraftKings Sportsbook mobile app.
For now, users are able to watch the German Bundesliga, Korean Baseball Organization, and other ongoing sporting events on the app itself. The deal with Sportradar will allow DK to offer additional sporting events as more leagues come back online in the near future.
DraftKings CEO Jason Robins said last week that the company has suspended its 2020 revenue outlook because the company cannot tell what its earning will realistically look like with so many sports still on hiatus. However, Robins also went on to say that he does not think the company will take a major revenue hit “if the sporting events calendar resumes to a normal state by 2021.”