DraftKings, Patriots’ Kraft Cash In on Betting-Fueled Surge
(Bloomberg) -- DraftKings Inc. and some early investors including New England Patriots owner Robert Kraft are taking advantage of the stock's 264% surge from an April debut to sell a combined 32 million shares.
The offering, underwritten by Credit Suisse Securities LLC and Goldman Sachs Group Inc., will include 16 million shares sold by DraftKings while the other half are being offered by some investors, the online gaming company said in a statement. Boston-based DraftKings said its proceeds from the offering will be used for general corporate purposes.
DraftKings shares closed at a record high $63.78 on Friday, up more than 260% since April and 56% above its price when it offered 40 million shares at $40 each in June. The stock fell as much as 6.4% Monday after news of the latest planned share sales.
Shalom Meckenzie, a billionaire Israeli executive who merged his company with DraftKings in April, led investors by registering to sell 8.5 million shares. Meckenzie will still be among DraftKings's largest shareholders despite dumping more than $500 million in stock. Raine Capital LLC and Robert Kraft were among others who filed to sell.
There's been no shortage of enthusiasm for DraftKings shares in the midst of bubbling excitement for the broader online sports betting industry in the U.S. as the pandemic depresses activity at traditional casinos. Evercore ISI estimated last month that DraftKings's addressable market would quadruple by the start of the 2022 National Football League season.
The company's offerings have prompted sell-side analysts to leap-frog one another, slapping on fresh price targets that are each higher than the one before. DraftKings has made waves by spending millions on partnerships with Walt Disney Co.'s ESPN network as well as with a range of professional sports teams, including the New York Giants and Chicago Cubs.
DraftKings and Flutter Entertainment Plc's FanDuel dominate the U.S. online sports gaming industry, but Penn National Gaming Inc.'s minority-owned Barstool Sports and its army of followers have been gunning to shake up the industry.
©2020 Bloomberg L.P.
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