DraftKings Decides to Capitalize With Secondary Offering

DraftKings Inc. (NASDAQ: DKNG) has announced the commencement of a secondary offering. Companies usually pursue secondary offerings as a way to raise capital after their stock has made a solid run. This is the case with DraftKings.

The offering consists of 33 million shares, with 14 million coming from DraftKings and 19 million being offered by certain selling stockholders. Additionally, the underwriters have the operation to purchase up to an additional 4.95 million shares.

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At the most recent closing price of $40.57 a share, the entire offering is valued up to roughly $1.54 billion. The underwriters for the offering are Goldman Sachs and Credit Suisse, and the company intends to use the net proceeds from the offering for general corporate purposes.

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Here’s what a few analysts have to say about DraftKings:

• Craig Hallum has a Buy rating.
• Northland Securities has a Buy rating.
• Oppenheimer has an Outperform rating and a $48 price target.
• Susquehanna Bancshares has a Buy rating with a $48 price target.
• Canaccord Genuity’s Buy rating comes with a $50 price target.
• Cannonball Research has a Buy rating and a $35 price target.
• Goldman Sachs rates it as Neutral with a $32 price target.

DraftKings stock traded down fractionally at $40.22 on Wednesday, in a 52-week range of $9.76 to $44.79. The consensus price target is $43.88.

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