DraftKings CEO Defends All-Time Low Stock: ‘Our Primary Focus is on the Long-Term’
Lauren Justice/Bloomberg via Getty Images. Pictured: DraftKings CEO Jason Robins
DraftKings reported earnings on Friday, announcing growth in monthly active users by 29 percent year over year and $417 million in quarterly revenue, leading to the raising of fiscal year guidance to approach or surpass $2 billion.
The market didn’t love it, leading to a sell-off that resulted in an 8 percent loss by 2:30 p.m. E.T. That’s an all-time low since going public two years ago.
After earnings were reported, Action Network sat down with DraftKings CEO Jason Robins.
Darren Rovell: Jason, you guys seem to be the lightning rod of the industry. We’ve had a whole week of your competitors reporting earnings, but it seems like people are chomping at the bit to see your numbers more than others. Why do you feel like that is the case?
Jason Robins: Well, we’ve always been at the center of the conversation, whether it is daily fantasy or sports betting. And when there’s focus on you, you tend to be a lightning rod.
DR: How do you feel about your positioning in the market?
JR: I feel great. We just reported better than expected revenue and EBITDA and raised our guidance on revenue and EBITDA. And, despite the inflationary environment, our customer is doing quite well.
That being said, we are living in a world where the macro economic picture isn’t as pretty. There are inflation concerns, a hawkish Fed dealing with it, a war in Eastern Europe and worldly supply chain issues. These are factors we can’t control, but we feel like we will succeed in the long term. We hope that when investors pick their heads up and are looking for stocks that are worth something in this environment that we’re in the conversation.
DR: How disconnected is sports gambling from the macroeconomy?
JR: Our category has actually done really well during tough economic times. People who take the time and put in the work to look at the past will find that in rough economic periods, gaming actually weathers the economic turbulence well. We should be beating the narrative out there.
DR: How do you continue to tell your story and not get sensitive to people dismissing it and betting against you?
JR: When you’ve gone through the things our company has gone through and things I’ve personally gone through, it’s a lot easier to regulate yourself emotionally. Don’t forget that it was a lot tougher when states were up against us trying to shut us down in daily fantasy. Now it’s the exact opposite. There are states trying to open to do business with us.
Sure, the stock price is a daily reminder that we can look at. But there’s always going to be critics. We raised money when we did and we’re lucky that we did at the time. If we went public a year later, we might have been screwed. We are now very well capitalized and it’s literally the first time in our 10-year history that we are controlling our own destiny.
So many asked us why we chose to raise money when we didn’t seemingly need it and now those same people are asking if we have enough? If I could draw up a playbook, what we did is exactly what I would do again. We can achieve everything just by continuing to execute.
DR: You’ve said you can become profitable by just dealing with the states you have now. Do you want it to slow down?
JR: Well it is true that we would become profitable faster, but we don’t have to root against California and Texas coming in line. There is a lot of pressure every day, but our primary focus is on the long term.