Have you been looking at $DKNG lately? It’s down 75% this year! I know this one the darling SPACs of the year last year trading as high as in the $70’s but it has steadily declined. So you can imagine one asking this question: is this the bottom? Is it? Or can it go lower?
Let’s see what people are saying
- James Robins (CEO of DraftKings) thinks it’s so undervalued that people selling at this level is going to regret.
- Jim Cramer thinks the space is too crowded and has too much competition so avoid $DKNG.
- Mixed view from Justin Pope (but come on, it’s from Fools.com).
- Thomas Allen from Morgan Stanley thinks it’s a buy with a price target of $31.
So all mixed. Our view? I think it has a bit more room to go down. I believe the barrier to entry is so little that they will continue to face more competition. Also, they really struggle to deliver an amazing experience for their customers that after so many years of existence, they finally decided to focus on customer experience. This used to be a VP position but SLT (senior leadership team) thinks it’s not that important so it looks like (1) they don’t even have a chief customer experience officer position (2) the previous VP position got demoted to a director level (3) few I have spoken to who have applied for the role, they don’t even hear back since their hiring/recruiting just blows.
Conclusion: this will head below $13 and we will take another look at $DKNG once it reaches that level. Until then, we will continue or perhaps, increase our short position. Don’t forget! Do your DD before you make any investment decisions.