Last Updated on June 1, 2020

DraftKings Stock Symbol

DraftKings is booming. As of Monday afternoon, the company’s share price is soaring to above $43 and the company’s market cap is just under $13.5 billion. This might seem strange given the current sports shutdown, but it appears as if investors are still bullish on the company.

DraftKings recently pulled off a reverse merger to go public. The current surge in DraftKings stock is impossible to attribute to one thing, but there are a few main factors that could be influencing its rise. Let’s dive into a few of the reasons for this growth.

1Q Upswing

First things first, DraftKings had an impressive first quarter, increasing year-over-year revenue by 30%. Of course, the absence of live sports will undoubtedly impact Q2 earnings, but the successful first quarter should help ease some of those concerns.

Furthermore, the shutdown has pushed DraftKings to look to other avenues like eSports, including Counter-Strike, Rocket League, and eNASCAR. These new betting options won’t be going away anytime soon.

 

Increasing User Base

Despite the current lull in sports betting, DraftKings is still looking for new ways to increase its user base. As the company continues to grow in size and influence, it will find new ways to attract users.

For one, the company is reportedly eyeing an acquisition of Bleacher Report, one of the largest and most influential digital sports publishers in the world. Acquiring a company with such a large readership would surely help bring in more users. It’s still unclear how serious DraftKings is about acquiring Bleacher Report specifically, but it’s quite clear that the company is exploring various avenues.

 

Sports Betting Legislation

Acquiring a digital publication with a massive readership is one way to increase a company’s user base, but the biggest tipping point for sports betting companies like DraftKings will come when sports betting legislation is passed in all 50 states.

The coronavirus pandemic is putting many states in a precarious position financially. Adding tax revenue back into the coffers through legalized sports betting is likely going to become a trend in the next year or so. California lawmakers recently tweaked sports betting legislation with the hopes that it can pass soon and provide relief to the state.

Even in states where sports betting is legal, mobile sports betting can provide a much-needed boost to the economy. New York is one such state where lawmakers are aiming to have a bill on Governor Andrew Cuomo’s desk by Dec. 31, 2020.

Widespread legalization feels like an inevitability at this point. For companies like DraftKings, that’s the ultimate goal.