DraftKings Inc. (NASDAQ: DKNG) entered the market with a solid move on Friday in a time when most companies are putting off their IPOs. This is not an IPO in the truest sense because DraftKings is coming public through a merger but similar rules apply.
The company is offering 50 million shares and 3 million PIPE warrants that will trade under the symbol “DKNGW.” At the close, the company will have a total of 313 million shares of Class A common stock outstanding.
The net proceeds from this offering will go to the selling security holders, but DraftKings expects to receive an aggregate of approximately $34.5 million from the exercise of the PIPE warrants, which will be put towards working capital and general corporate purposes.
The combined company will be the only vertically integrated, pure-play sports betting and online gambling company in the United States. Diamond Eagle plans to change its name to DraftKings, reincorporate in Nevada and remain listed on Nasdaq under a still-to-be-determined ticker symbol.
Sports betting is currently legal in 16 states and the District of Columbia, and DraftKings operates in six. Not all these states have legalized online and mobile sports betting. In those states, a physical location is required. DraftKings has locations in Iowa, Mississippi, New York, and New Jersey. Online and mobile sports betting is available in Indiana, New Jersey, Pennsylvania, and West Virginia. The remaining states have yet to finalize how the legal sports betting will operate.
Included in the combination is SBTech, a turnkey technology provider with omnichannel sports betting solutions, trading services, and marketing and bonus tools, with more than 50 partners in more than 20 countries.
DraftKings stock was last seen up about 9% at $19.09, with a range of $17.60 to $20.75 on the day. Also over 10 million shares have moved as of the final hour of trading.
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