DraftKings Faces NFT Lawsuit,

DraftKing Inc: Cathie Wood’s Position, NFTs Sales Lawsuit, and Financial Analysis

DraftKing Inc. (NASDAQ: DKNG) is a leader in digital sports entertainment and gaming, providing multichannel sports betting and gaming technologies to sports and gaming entertainment operations across 17 states. In this article, we’ll explore Cathie Wood’s investment in DraftKing, the company’s foray into the NFT marketplace, and Pomerantz LLP’s lawsuit alleging unregistered securities fraud and unlawful business activities. Additionally, we’ll provide a financial analysis of their recent earnings report, revenue growth, and market positioning.

Founded in 2011, with headquarters in Boston, Massachusetts, DraftKing operates through its brand in 5 states, and Golden Nugget Online Gaming and iGaming products and gaming brands in 3 states. As of Q1 2021, Cathie Wood of Ark Invest held the 9th most significant position in DraftKing, worth $550 Million and 3.94% of their equity portfolio. She also owns 5.57% of the outstanding company stocks. Cathie’s estimated purchase price is around $1.15 Billion, with a loss of 52%.

DraftKing announced its plan to launch DK Marketplace, a platform offering curated NFTs drop for USD purchase and support for secondary market transactions, on July 21, 2021. The platform sold the first NFT featuring football player Tom Brady on August 11, 2021, and sold from $12 to $15,000 per NFT. However, the lawsuit by Pomerantz LLP is investigating claims on behalf of its investors. They allege that DraftKing and some of its officers were involved in unregistered securities fraud and certain unlawful business activities. Additionally, it claims that the NFT sale constitutes unregistered securities, and with the DK marketplace, they are operating an unregistered securities exchange.

Regarding December 2022 data, DraftKing’s revenue jumped by 80.67% from $855.13 Million, while revenue per share was $5.13, and quarterly revenue growth hiked by 80.70%. The operating expense gained 6.37% from $599.15 Million, and net income hopped 25.62% from negative $242.70 Million. The net profit margin leaped 58.83% from negative $28.38. Earnings Per Share (EPS) jumped 37.32% from negative $0.50, and EBITDA gained 41.72% from negative 181.18 Million. The last earnings were reported on February 12, 2023, where the estimated revenue was $802.47 Million, while it was reported to be $855.133 Million. This came with a surprise of 52.663 Million and a raise of 6.56%. The subsequent earnings are scheduled on May 4, 2023, with expected revenue of $693.19 Million.

In terms of market positioning, DraftKing’s current position is its third attempt to break out above the $21 mark towards the supply zone. An upward-moving EMA and positive MACD both support its northbound momentum. However, if the price drops, it might bounce off the $19.49 mark and consolidate below the supply zone. The likelihood of a drawdown would depend on multiple factors.

To conclude, DraftKing’s investment in the NFT marketplace, Cathie Wood’s position, and the Pomerantz LLP lawsuit all contribute to the company’s evolving financial landscape. As the company continues to grow and adapt, investors, and enthusiasts alike should monitor their financial performance and legal developments closely.

Disclaimer: The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.