Draftkings Shares Plummet Following Reports of Black Market Ties
Shares fell more than 7 per cent after the Hindenburg report was released on Tuesday
DraftKings’ share price has plummeted today following a report issued by Hindenburg Research. The report made some bold allegations about the brand, claiming that Draftkings’ technology subsidiary SBTech, whom it merged with in as part of a SPAC deal, earns as much as half its revenue from illegal gambling markets.
Shares fell more than 7 per cent after the report was released on Tuesday, seeing Hindenburg declare that it had taken a short position in DraftKings, meaning it profits if DraftKings’ stock price falls.
As part of the report, the firm quoted interviews with a number of anonymous, former Draftkings employees. Its claims were bolstered by its own analyses of Securities and Exchange Commission filings and back-end internet infrastructure.
“This report is written by someone who is short on DraftKings stock with an incentive to drive down the share price,” DraftKings said.
“Our business combination with SBTech was completed in 2020. We conducted a thorough review of their business practices and we were comfortable with the findings. We do not comment on speculation or allegations made by former SBTech employees.”
