Following Earnings Call, DraftKings Stock Price Continues to Rise Despite COVID-19 Uncertainty
David L. Ryan/The Boston Globe via Getty Images. Pictured: Entrance to DraftKings’ Boston offices
DraftKings stock again soared Friday after company executives boldly proclaimed that they didn’t foresee the COVID-19 crisis and the lack of sports hurting their fiscal 2021 revenue.
That, combined with the fact that DraftKings’ primary business still rose 30% in the first quarter (which ended March 31) versus the first quarter of 2019, seemed to have sealed the deal.
In the first hour and a half of trading, the stock was up nearly 10%, marking an astounding 55% rise since its April 23 debut as a public company.
To be fair, only 20% (18 out of the 91 days) of the quarter came after everything was halted (March 13), but DraftKings chief financial officer Jason Park said that prior to that date the business was tracking to be 60% higher.
Citing the uncertainty of COVID-19, the company would not provide guidance on fiscal 2020 revenue.
Alternative offerings like overseas soccer, table tennis and eSports didn’t serve to make up the gap of the loss of the major sports, but CEO Jason Robins did say that eSports was “a notable standout.”
DraftKings has four million users, which includes both daily fantasy and sports betting. The average monthly spend of those users has gone up from $37 in the first quarter of 2019 to $41 today.
For those shareholders looking for bottom line revenue alone, iGaming gave a huge boost. Resorts, DraftKings’ land-based partner in New Jersey, reported that iGaming, which includes virtual table games like poker and blackjack, was up 126%.
While the company has waited for live sports to return, Robins said the company has, in the meantime, been doubling down on building its live betting business, which is one of its top priorities.
Company executives, now under SEC monitoring as a public company, would not speculate whether COVID-19 would ultimately slow the sports gambling market or increase the number of states willing to legalize online sports betting in search of a new revenue stream to cover burgeoning costs.
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