DraftKings Pursues UK Acquisition and Catches NFT Fever
Online sports betting platform DraftKings is pursuing an aggressive growth strategy. The company has made a $20 billion offer to acquire British industry peer Entain in a stock and cash deal, according to a report on CNBC.
In addition to M&A, DraftKings also has the blockchain on its mind and is joining the non-fungible-token (NFT) craze through a digital collectible series featuring Tiger Woods.
Shares of DraftKings were under pressure today, falling 7% to $52. Meanwhile, Entain’s stock advanced 15%, as is typical for the target company in an acquisition.
DraftKings shares are up 20% year-to-date but are trading off their all-time high of $74. Earlier this month, Wells Fargo analysts started coverage on the stock with an overweight rating and a $75 price target.
The Entain deal, if successful, would mark an international expansion for DraftKings, whose business has been booming throughout the pandemic. In Q2, the company reported revenues of nearly $300 million and boosted its sales outlook for the full year to $1.29 billion.
In addition to sports betting, DraftKings and Entain both participate in the casino gambling segment. Entain is behind products such as partypoker, PartyCasino, Gala Bingo and many others, while DraftKings similarly has an online casino.
To sum up: DraftKings (No. 2 US sports betting handle) is going after Entain, the 50% owner of BetMGM (No. 3 US sports betting handle) and a massive European gaming leader in its own right. Both are major players in US iCasino, which is (much) more lucrative than sports betting.
— Ryan Butler (@ButlerBets) September 21, 2021
DraftKings is not Entain’s first suitor. The target company recently turned down an $11 billion takeover bid by MGM Resorts, blaming a valuation that was too low. The two companies maintain a partnership.
DraftKings and NFTs
DraftKings is cashing in on the popular NFT phenomenon through a set of digital tokens featuring legendary golfer Tiger Woods. The NFTs are the result of a collaboration between NFT platform Autograph and Woods, while the digital collectibles are being sold on the DraftKings Marketplace.
The Premiere edition of the NFTs, which debuted on Sept. 21, is already sold out, according to the website. A signed edition series will premiere on Sept. 28, and the prices range from $50 to $1,500. There will be thousands of Tiger Woods NFTs but only 300 of them will be signed.
Autograph has had success partnering with other professional athletes for NFT collectibles including the likes of NFL great Tom Brady, MLB star Derek Jeter and the NHL’s Wayne Gretzky. Fans scooped up those collections in a matter of minutes.