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HomeTechnologyDraftKings stock falls 10% after Hindenburg Research reveals short position

DraftKings stock falls 10% after Hindenburg Research reveals short position

Pavlo Gonchar | LightRocket | Getty ImagesShares of sports betting firm DraftKings fell on Tuesday after Hindenburg Research announced that it had taken a short position against the stock.The stock, which has been one of the best performers on Wall Street since going public through a merger with a special purpose acquisition vehicle last year, was down more 10% in premarket trading.In the report, Hindenburg compares DraftKings valuation to that of rival firms and questions the company’s promotional spend and future potential in the highly competitive sports gambling landscape.The report also alleges that SBTech, a European technology company that merged with DraftKings as part of the SPAC deal, generates significant revenue from questionable gambling practices in overseas markets, particularly in some Asian markets.DraftKings did not immediately respond to a request for comment.Hindenburg is a relatively new short selling firm that has made several high profile calls against SPACs over the past year.The firm took out short positions against clean-energy vehicle startups Nikola and Lordstown Motors, which have suffered from executive turnover and falling stock prices since Hindenburg’s reports.Hindenburg also published a negative report against Clover Health in February but did not take a position. The stock fell in the months following that move but rebounded in early June amid increased interest from retail traders on Reddit.Become a smarter investor with CNBC Pro. 
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