Please ensure Javascript is enabled for purposes of website accessibility

Why DraftKings Stock Is Up Today

By Howard Smith - Jan 20, 2021 at 10:32AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After record results in Pennsylvania, the company announces two new growth initiatives.

What happened

Shares of DraftKings (DKNG 8.18%) jumped 5.5% early Wednesday before settling back to a gain of 2.1% as of 11 a.m. EST.

Several news items boosted the stock that has already gained almost 14% just since the start of 2021. 

So what

The online sports betting company announced the first 2021 launch of its sportsbook and casino mobile app in a new state yesterday. DraftKings' growth into Michigan comes after data from Pennsylvania showed record betting business there for the company in December.

football with betting ticket and $100 bills

Image source: Getty Images.

DraftKings surpassed $100 million in bets in Pennsylvania in December, its fourth consecutive month doing so. The company handled a record $131.5 million in bets, with $5.4 million in revenue. Promotional credits prevented revenue from passing the November 2020 level. 

Now what

Its launch into Michigan on Jan. 22 will mark the 11th state with DraftKings' mobile sports betting app. The move is through a deal with Bay Mills Resort and Casinos, the longest-operating gaming facility in the state. 

Separately, DraftKings said yesterday that it is teaming up with sports website Bleacher Report to offer a Super Bowl LV proposition, or prop, bet reveal show that will stream live on Bleacher Report's app. Prop bets are made on specific events or players, and not the overall outcome of the game. DraftKings will be offering over 200 different prop bets for the Super Bowl, it said in a statement.

Investors in DraftKings should be happy with the announcements. But there is also growing competition in the space. Pennsylvania, for example, listed more than a dozen sports betting operators in December 2020. As with any investment, research on valuation and the competition for DraftKings should be ongoing as its growth story plays out.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

DraftKings Inc. Stock Quote
DraftKings Inc.
DKNG
$14.15 (8.18%) $1.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.