DraftKings (DKNG) - Get DraftKings Inc. (DKNG) Report shares fell sharply Wednesday after the sports gambling company announced the pricing of its secondary share offering and more positive coronavirus tests emerged from the NFL.
One New England Patriots player tested positive and two Tennessee Titans players tested positive. Already, the NFL announced last week that the Tennessee-Pittsburgh Steelers game scheduled for last Sunday would be rescheduled for later in the season.
The Kansas City Chiefs-New England Patriots game was delayed from last Sunday until this Monday. There is now concern that more games will be delayed. Football accounts for a chunk of DraftKings revenue.
DraftKings recently traded at $52.44, down 7.64% The stock has risen 431% year to date.
The company’s public offering consisted of 32 million shares of Class A common stock. The offering price was $52 a share for a total offering of $1.664 billion. DraftKings will sell 16 million shares of its shares, and other stockholders will unload 16 million shares.
DraftKings won’t receive any proceeds from the sale of the other stockholders. It plans to use the proceeds it does receive for general corporate purposes. DraftKings has granted the underwriters a 30-day option to purchase up to 4.8 million additional shares of stock.
Last month, Argus Research initiated coverage of DraftKings with a buy recommendation and a share-price target of $65.
“The online gaming industry is in the early stages of growth, with only 3% of gross gaming revenue in the U.S. generated online, compared to 45% in more mature online gaming markets such as the U.K,” Argus analyst John Eade wrote in a commentary.