Shares of DraftKings (NASDAQ:DKNG) have jumped as much as 5.1% in trading on Tuesday after announcing a big partnership in non-fungible tokens. Shares are hitting their highs of the day as I'm writing this at 3 p.m. EDT today, and have been climbing all day.
This morning, it was announced that former Yankee Derek Jeter would place an NFT on DraftKings Marketplace, the company's NFT marketplace. This follows digital collectibles from Tom Brady, Wayne Gretzky, Simone Biles, and a total of 40 athletes.
This NFT comes from Autograph, an NFT platform that has worked with athletes to bring a number of NFT options to market. These NFTs look a lot like trading cards that have been popular for decades but in a digital format. The theory is that users will want to collect these exclusive products.
DraftKings is trying to get into the NFT trade by having a marketplace that it can allow customers to buy and sell on. So having big names drop NFTs in the marketplace is important. What's still unclear is how big this market will be for sports-related NFTs and whether or not DraftKings will be able to make a profit off it.
Today, investors think NFTs could be another nice addition for an already hot growth stock like DraftKings, but they would be wise to not put too much faith in this being a big market and focus on the company's core business for the long term.