DraftKings is proving the outdated enterprise adage that it takes cash to make cash by shedding practically $350 million in Q3 2020. However these losses are hardly the harbinger of a failing enterprise. Actually, DraftKings is gaining worth at a speedy clip and is definitely a contender within the sweepstakes to dominate the newly opened regulated US sports activities betting market.
Phrase of DraftKings massive loss got here through the corporate’s official Q3 stories which can be filed with the US Securities and Alternate Fee (SEC). However the filings embody some fairly cheap explanations and a robust argument for large earnings sooner or later.
A giant chunk of DraftKings’ Q3 was the results of a significant $203 million greenback gross sales and advertising blitz geared toward harvesting new gamers from the profitable US regulated sports activities betting market. This type of airwave blanketing is precisely what the corporate did again when it was a every day fantasy sports activities website and had no real interest in sports activities betting.
After all DraftKings, like each different sportsbook on the planet, benefited from the return of reside sports activities. In an buyers name, reported on by LegalSportsReport, Jason Robins, DraftKings’ CEO commented on the scenario saying, “The resumption of main sports activities such because the NBA, MLB and the NHL within the third quarter, in addition to the beginning of the NFL season, generated super buyer engagement.”
All these new gamers will finally play off this spherical of bonuses and DraftKings will probably be positioned properly to have an extended and really worthwhile relationship with them. Traders have heard this message loud and clear and drove the compay’s inventory worth up 10 % to $45 a share.
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