DraftKings Inc. (NASDAQ: DKNG | DKNG Price Prediction) shares slid on Monday after it was announced that the online gaming firm would be conducting a secondary offering. Now seems to be as good a time as any, considering shares have gained roughly 5-fold since the stock came public earlier this year.
In terms of the offering, the company intends to sell 32 million shares of its Class A common stock, consisting of 16 million shares being offered by DraftKings and 16 million shares being offered by selling stockholders. There will be an overallotment option for an additional 4.8 million shares.
The underwriters for the offering are Credit Suisse and Goldman Sachs, who are acting as joint book-running managers.
The company intends to use the net proceeds from this offering for working capital and general corporate purposes. Note that the company will only receive the net proceeds from the shares that it is selling.
This isn’t even the first secondary offering that DraftKings has pulled off this year. The company previously conducted a secondary offering of 40 million shares back in June, when shares were priced around $40 apiece.
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Also for those late to the party, DraftKings operates as a digital sports entertainment and gaming company. It provides users with daily sports, sports betting and iGaming opportunities. It also is involved in the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.
Excluding Monday’s move, DraftKings has vastly outperformed the broad markets with its stock up about 496% year to date.
DraftKings stock was last seen down about 7% at $59.13, with a 52-week range of $9.85 to $64.19. The consensus analyst price target is $52.50.
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