Shares of DraftKings Inc (NASDAQ:DKNG) hit a new high of $64.19 on Oct. 2. An offering has sent shares lower.
What Happened: DraftKings announced Monday it was selling 32 million shares. The company is selling 16 million new shares with existing shareholders selling 16 million. The company is also offering 4.8 million shares to underwriters.
Late Tuesday, shares were priced at $52 for the offering, which was significantly lower than the company’s share price of $60.55 when it announced it was selling shares.
Why It's Important: The pressure on DraftKings comes as the NFL faces uncertainty. The game between the Tennessee Titans and Pittsburgh Steelers was postponed last week after several positive COVID-19 tests in the Tennessee organization. An additional player has tested positive this week for the Titans.
New England Patriots CB Stephen Gilmore tested positive for COVID-19 on Wednesday, which marks the third Patriots player. He played in Monday night’s game, which had already been moved from Sunday after two players tested positive on the team late last week.
ESPN also reports that a player on the Las Vegas Raiders has tested positive.
What's Next: A lock-up period expires on Oct. 20 for some existing DraftKings shareholders, which could put more pressure on shares.
In its share offering prospectus, DraftKings listed projected third-quarter revenue of $131-$133 million, growth of over 40% year-over-year.
DraftKings also reported online sports betting handle up 460% year-over-year in the third quarter, including a 110% year-over-year increase in New Jersey. The company saw online casino handle rise 335% year-over-year in the third quarter.
DKNG Price Action: DraftKings shares were down 6% on Tuesday to $56.78. Shares are down 8% to $52.20 early Wednesday morning.