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DraftKings Stock Rises as It Forges Partnership With NHL

DraftKings will become an official sports betting, daily fantasy sports and igaming partner of the NHL in the U.S., the company says.
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DraftKings  (DKNG) - Get DraftKings Inc. (DKNG) Report shares rose Wednesday, after the online sports gambling company said it agreed to a partnership with the National Hockey League.

The company will become “an official sports betting, daily fantasy sports and igaming partner of the league in the U.S.,” it said.

DraftKings on Wednesday closed at $49.82, up 1.8%. It has slumped 14% in the past six months amid valuation concerns.

“To complement the deal, DraftKings has also reached an agreement with AT&T’s T Turner Sports, including Bleacher Report, to be the exclusive sportsbook and daily fantasy sports provider for their coverage of the NHL,” DraftKings said.

Citigroup analyst Jason Bazinet initiated coverage of the company Monday, with a buy rating and a $66 price target.

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DraftKings offers investors exposure to "robust, long-term" growth in the sports gaming market, he said. It's well-placed to capitalize on market consolidation and user expansion.

Last month, DraftKings lifted its bid for British gaming giant Entain, which operates the Coral and Ladbrokes betting shops in the U.K., to around $22.4 billion. That bid faces potential opposition from DraftKings partner MGM Resorts  (MGM) - Get MGM Resorts International (MGM) Report.

TheStreet.com founder Jim Cramer said an acquisition of Entain could change how DraftKings approaches customer acquisition. "It makes a ton of sense as long as DraftKings doesn't have to pay too much," he said.

In August, DraftKings said the Securities and Exchange Commission is investigating allegations from short-seller Hindenburg Research against the company.

The allegations include “false and misleading statements and/or failures to disclose information about the company’s business and prospects,” DraftKings said.