raftKings and some early investors including New England Patriots owner Robert Kraft are taking advantage of the stock’s 264% surge from an April debut to sell a combined 32 million shares.
Underwritten by Credit Suisse and Goldman Sachs, the offering will include 16 million shares sold by DraftKings while the other half are being offered by certain selling stockholders, the online gaming company said in a press release. Boston-based DraftKings said its proceeds from the offering will be used for general corporate purposes. The underwriters have the option to purchase an additional 4.8 million shares.
DraftKings shares closed at a record high $63.78 on Friday, up more than 260% since April and 56% above its price when it offered 40 million shares at $40 each in June, Bloomberg reports. The company had a market value of over $22 billion on Friday, making it the second-largest U.S. gambling company behind only Las Vegas Sands. The stock fell as much as 6.4% Monday after news of the latest planned share sales.
Shalom Meckenzie, the founder of SBTech, who merged his company with DraftKings in April, led investors by registering to sell 8.5 million shares. He will still be among DraftKings’s largest shareholders despite dumping more than $500 million in stock. Raine Capital LLC and Robert Kraft were among others who filed to sell.
Also on Monday, DraftKings said it expected to report third-quarter revenue of $131 million to $133 million, Barron's reports. The company said that “atypical hold rates from NFL wagering” had an estimated negative impact of about $15 million in the quarter. The company’s hold, or profit margin, has historically been around 6.5%.
DraftKings said its online sports betting handle was expected to have risen 460% in the third quarter relative to the year-ago period and that online gaming revenue was expected to be up 335%. DraftKings expects its monthly unique players to be about 1.02 million in the third quarter, up 64% from the same period a year earlier. DraftKings also expects sales and marketing expense of $200 million to $210 million in the third quarter.
Evercore ISI estimated last month that DraftKings’s addressable market would quadruple by the start of the 2022 National Football League season. DraftKings has spent millions on partnerships with Walt Disney Co.’s ESPN network as well as with a range of professional sports teams, including the New York Giants and Chicago Cubs.