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Why DraftKings Stock Surged on Wednesday

By Danny Vena – Jul 21, 2021 at 12:52PM

Key Points

  • DraftKings is adding an NFT ecosystem to its offerings.

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The hype surrounding non-fungible tokens is propelling the stock higher.

What happened

Shares of DraftKings (DKNG -4.23%) climbed sharply higher on Wednesday, surging as much as 6.5% early in the session. As of 12:28 p.m. EDT, the stock was trading up 5.9%.

The online betting and fantasy sports company surged on news it had inked a deal with non-fungible token (NFT) platform Autograph to launch a marketplace for digital, collectible content. 

A cell phone showing a winning online bet with sports fans in the background.

Image source: Getty Images.

So what

DraftKings Marketplace will be the exclusive purveyor of officially licensed digital sports collectibles offered by Autograph, which was co-founded by NFL quarterback Tom Brady. DraftKings will also host curated releases of digital sports memorabilia, as well as act as a facilitator for the secondhand market. Sports aficionados will be able to buy, sell, and trade their virtual collectibles using a new or existing DraftKings account.

Autograph boasts a laundry list of high-profile professional athletes including Tiger Woods, Wayne Gretzky, Derek Jeter, and Naomi Osaka.

Now what

NFTs have been all the rage lately, and can represent ownership of any virtual asset, including digital artwork, music, or literature. Ownership of these NTFs is tracked using blockchain, the same technology that underpins cryptocurrency. Each NFT is unique and can have only one owner.

One of the most high-profile examples took place earlier this year. Mike Winkelmann, known professionally as digital artist Beeple, sold a digital work of art via Christie's auction house for a whopping $69 million. 

What constitutes a NFT varies widely, however. Jack Dorsey, the co-founder and CEO of Twitter, sold the digital rights to his first tweet on the platform for roughly $2.9 million. 

With interest in NFTs surging, DraftKings could attract a host of new users to its platform.

Danny Vena has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.

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