DraftKings (NASDAQ:DKNG) is getting a much-needed capital infusion. On Wednesday, the online sports betting specialist revealed the pricing of its latest stock offering as it raises money to support the young business.
DraftKings' offering prices 32 million shares at $52 each, which works out to just under $1.7 billion of total capital. A significant portion of that haul will go to other stockholders, though, who are capitalizing on the stock's sharp 2020 rally.
The company stands to collect proceeds from about half of the offering -- minus fees. Executives said the net proceeds will go toward general corporate purposes, which could mean anything from payrolls to acquisitions.
The move comes at a tricky time for the business, which only went public in April. DraftKings is still working to build a profitable online betting platform in the wake of COVID-19 disruptions.
Management said as recently as mid-August that it predicts negative operating cash flow "for the foreseeable future," due to its focus on establishing the business. This week's capital raise, while diluting to current stockholders, should help offset those losses so that DraftKings can make bolder investments into growth initiatives.