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DraftKings Investigated by SEC on Hindenburg Allegations

Short-seller Hindenburg alleges 'false and misleading statements and/or failures to disclose information' at DraftKings. The SEC is inquiring.
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DraftKings  (DKNG) - Get DraftKings Inc. (DKNG) Report said in an SEC filing that the agency is investigating allegations from short-seller Hindenburg Research. against the online sports-gambling heavyweight.

The allegations include “false and misleading statements and/or failures to disclose information about the company’s business and prospects,” the company said in its filing. “We intend to vigorously defend against these claims.”

Further, “On July 9, the company received a subpoena from the Securities and Exchange Commission seeking documents concerning certain of the allegations raised in the Hindenburg Report,” DraftKings said.

“We intend to comply with the related requests and are cooperating with the SEC’s ongoing inquiry. … Despite the potential for significant damages, we do not believe, based on currently available information, that the outcome of this proceeding will have a material adverse effect on our financial condition.”

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DraftKings stock at last check firmed 0.9% to $50.94. It has fallen 20% over the past six months.

The stock benefited Friday from DraftKings’ second-quarter earnings report, which included a narrower-than-expected loss and an increase in guidance for the remainder of the year.

The company looks forward to a rebound in online sports betting and interest in non-fungible tokens and other media that continue to draw users to its online platform.

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DraftKings reported a loss of $305.5 million, or 26 cents an adjusted share. Analysts surveyed by FactSet had forecast a second-quarter adjusted loss of 54 cents a share.

Revenue totaled $298 million, quadruple the year-earlier figure and above analysts' estimate of $245.5 million.