DraftKings Shares Skyrocket Due to Table Tennis and Korean Baseball Bets

Since DraftKings went public in April, its shares have jumped 50% with a lot of online gambling activities, from video games to charity golf match, table tennis, and Korean baseball.

The daily fantasy and sports-betting company continued with its decision to go public on April 24 amid the impact of the coronavirus pandemic on the markets. DraftKings went public through a reverse merge and its stock has skyrocketed since then, according to Forbes.

In its first-quarter earnings report last week, DraftKings reported a loss of 18 cents per share on revenue of $113 million, beating analysts’ expectations. The daily fantasy and sports-betting company said it doesn’t expect the coronavirus pandemic to have any long term impacts on its business.

The company has a market valuation of $9.4 billion, making it the second-highest market value in the US gambling industry, following Las Vega Sands ($37.8 billion).

Wall Street analysts are quite optimistic about DraftKings’ stock as five of them rate it a Buy, and one rates it a Hold. There are also expectations for DraftKings which currently trades at $29 per share to hit between $30 to $35 per share, soon.

In as much as there are currently no live professional sports to bet on, sports bettors have diverted their attention to video games and esports. According to CEO Jason Robins, there has been a “huge growth area over the past couple of months” for the company.

“I think what it shows you is there’s a lot of pent-up demand for sports,” Robins said during the company’s earnings call. Adding that, “people are hungry for sports to come back.”

There has been a steady increase in demand for gambling on all kinds of events besides US sports, including foreign sports like the Korean baseball and Russian table tennis; news, reality TV shows and pop culture.

There have also been increased engagements in the NFL Draft, especially in April. The company has also seen strong interest in Ultimate Fighting Championship events. It says there are high expectations in the demand for events such as NASCAR and German Bundesliga soccer.

While many analysts and experts are optimistic about DraftKings and its possible performance in the market, Goldman Sachs remains indifferent about it. Stephen Grambling of Goldman Sachs has no doubt that DraftKings has great potentials of leading the US sports betting industry. However, he warns that its stock may not have a long-lasting upside at more than 50% of its public offering. Therefore, investors should wait a little longer before buying.