Should You Scoop Up Shares of DraftKings on the Dip? By StockNews
DraftKings is a favorable company (NASDAQ:) due to its recent entry into NFT space, and future expansions in the online betting market. However, investor uncertainty about a $22 billion acquisition deal with a British sports betting firm and current class-action lawsuits related to the merger are casting a pall over the company’s growth prospects. Is the stock likely to rebound from recent price drops? Continue reading to find out more.
DraftKings Inc. (DKNG), a digital sports betting company, offers sports betting and other iGaming services. The company went public on April 24, 2020, through a reverse merger with blank-check company Diamond Eagle Acquisition Corp . Its recent launch of an NFT ecosystem—DraftKings Marketplace—to give sports fans access to digital collectibles from top athletes has driven its shares up 10.2% year-to-date. But DKNG’s stock price has declined 9.1% over the past month and 23% over the past six months. Closing yesterday’s trading session at $51.33, its stock is trading 31% below its 52-week high of $74.38.
DNG currently trades lower than its 200-day and 50-day moving averages, $54.15 and $55, which indicate a downward trend. While expanding its online Sportsbook could increase its customer base, and improve fan engagement further, the number of class-action lawsuits against it could encourage bearish investor sentiment.
Further, its proposed takeover of British gambling firm Entain, which already has a joint venture with MGM Resorts International (NYSE:), requires MGM’s consent. In the short-term, the uncertainty around the deal may cause the stock to experience more extreme price swings.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.