DraftKings, the daily fantasy sports giant and leader in the emerging US sports betting market, made its debut on the stock market this week. The move comes at an interesting time, given that the ongoing postponement of all sporting activities has essentially left them without a product to sell.
Now available on the Nasdaq with ticker symbol “DKNG”, the public debut was the product of a merger with Diamond Eagle Acquisition Corp, a group who acts as a “blank-check” firm holding little to no operating assets.
Forgoing the traditional route of opening with an initial public offering, DraftKings’ decision to merge allowed them to avoid the red tape they would have likely faced had they opted to make the move alone.
SBTech, a sports betting platform provider, also joined in the merger, with the three-way deal bringing the initial company valuations up to $3.3 billion.
DraftKings Make Stock Market Debut: A Milestone Moment
“Today marks another milestone for DraftKings and the future of digital sports entertainment and gaming in America,” stated DraftKings CEO Jason Robins. “I am confident that the new DraftKings will progress our goal of offering the best, most innovative sports and gaming products to our customers.”
Today marks another milestone for DraftKings and the future of digital sports entertainment and gaming in America …I am confident that the new DraftKings will progress our goal of offering the best, most innovative sports and gaming products to our customers.
DraftKings CEO Jason Robins
In an interview with CNN, Robins added that he felt now was the perfect time to ink the deal for DraftKings’ to go public, given the difficulties in raising capital through other means within the current sports environment.
While the site has seen a decline in traffic overall on reaction to the pause in sporting competitions, Robins pointed to the company’s ability to quickly change directions by focusing on less traditional wagering options as a sign of their resiliency when facing unprecedented scenarios.
Numerous sportsbooks have reported that their safety net came from an unlikely place, as Russian Table Tennis emerged as the go-to option for sports bettors still looking to make a wager.
Esports and simulated sporting events have also seen a quick rise in popularity, with many sportsbooks offering computerized matchups between teams via the popular NBA2k and Madden game series.
When live sports do return to action, many betting shops are expecting an instant surge of action as the pent-up desire to place a wager can finally be released. Add in the fact that fans will likely be barred from attendance, betting will serve as an outlet to liven up the overall excitement in watching a game playout.
So for those not willing to risk their money on Russian ping pong, maybe dedicate some of your bankroll to Wall Street. Diamond Eagle has already experienced a 60% growth this year alone as investors eagerly awaited the merger.