Summary
- DraftKings joined forces with ESPN to promote its online sports betting products on ESPN-affiliated websites.
- Michael Jordan also became a special advisor to the board of directors and received an undisclosed equity stake in the company.
- There's still time to get into DraftKings stock before the ESPN deal bears fruit.
DraftKings (NASDAQ:DKNG) is one of the main online sports gambling companies with a lot of growth prospects in the future.
The company went public on April 24th, 2020, using the popular SPAC strategy when it merged with Diamond Eagle Acquisition Corporation at an IPO price of $19.
(Source: BizJournals)
Since then, many developments took place, and DKNG stock is on a tear.
I'm going to discuss the main bullish catalysts and present my current valuation and long-term price target for DraftKings stock.
I'll also discuss both positive as well as risk factors that could affect the stock price in the short term.
As with most new IPOs, we must use forward-thinking with an unbiased mindset that embraces change.
What's important for the future of DraftKings is what will happen in the future, not the past.
As Warren Buffett once said:
If past history is all there was to the game, the richest people would be librarians.
Online Sports Gambling Is A Big Business
Gambling stocks are surging across the board, including big gains from GAN (GAN) and Penn National Gaming (PENN).
According to Grand View Research, U.S. online gambling will grow at 11% CAGR over the next 6 years.
(Source: grandviewresearch.com)
Sports betting makes up the majority of all online gambling revenue, so this puts DraftKings in a good position as online gambling grows.
