DraftKings Stock Drops a Further 6%, When Will DKNG Turn Around?

A rising name in the world of sports betting; DraftKings looks poised to cash in on an unexplored market. Illegal throughout the U.S until relatively recently, legislation changes are leading investors to look towards the sports betting industry for exponential growth in the coming years. Draftkings is top of the U.S sports gambling podium – incredibly well situated to make the most out of the betting boom. 

However, the markets haven’t been all that receptive to Draftkings’ uphill battle. With the company still in its high-growth stage – it’s not surprising to see quarterly losses as the company spends drastically on sales and marketing in order to build and maintain a presence in an increasingly competitive market. Following the company’s recent Q4 report, the stock tumbled 21%; resulting in a total 71% depreciation in the last year. 

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Today, DKNG sold off a further 6% in premarket trading as investor growth doubts continue to dominate price action. The company’s loss of nearly $1B definitely hurt eager bulls as expectations came in around $670M – yet upon a closer look – investors shouldn’t be left reeling regarding a company in such an early stage, but more importantly, with such a lucrative road ahead. 

Draftkings strict focus on expanding market territory should eventually pay off. Sports betting is still only legal amongst 36% of the U.S population – so we can hardly measure the growth of Draftkings by its current market maturity. As more and more states follow suit with legislation changes, Draftkings should be able to capitalize on the company’s existing brand recognition to boost inter-state interaction and immediately swoop in on available market share. DKNG stock looks incredibly appealing at its current price, with an upside as large as the potential for the U.S sports betting industry.