Why Jim Cramer Isn't Buying DraftKings Stock
Time to make a bet on DraftKings stock?
Following a strong public debut on April 24, DraftKings announced Tuesday that it plans to offer 33 million additional shares after its stock has more than doubled since its initial public offering.
As of premarket trading Wednesday, the stock was trading down around 5% to $40.57, well above its IPO day closing price of $19.35.
The new offering prices the stock at $41.79.
DraftKings will offer 14 million Class A shares to the public. The other 19 million shares will come from selling DraftKings stockholders.
An additional 4.95 million shares of common stock will be offered to underwriters for a 30-day period.
Though the stock took a hit on the initial news, it has managed to gain significantly in the months since its debut, racking up a $12 billion market cap, despite a lack of professional sports due to the coronavirus pandemic.
Investors continue to bet on both the return of sports and DraftKings’ ability to maintain its market share in a growing digital sports betting environment in the U.S.
But is it worth buying into the secondary offering?
Jim Cramer said that the fact that no one seems to want to hold onto the stock for long leaves him looking for less risky bets.
Catch his full breakdown in the video above.