DraftKings slides on recession concerns, JJ Watt social media sack

Jun. 16, 2022 12:09 PM ETDraftKings Inc. (DKNG)By: Clark Schultz, SA News Editor19 Comments

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DraftKings (NASDAQ:DKNG) fell 11.45% on Thursday as investors bid down consumer discretionary stocks seen at risk if the U.S. economy heads into a recession.

The company also appears to have lost a social media battle with Arizona Cardinals football star JJ Watt. The sports betting operator responded to a JJ Watt tweeted picture of himself hurling a football with the word "intercepted." That led Watt to posting a screenshot of DraftKings' stock chart over the last year and telling DKNG that "you might want to think about intercepting some profits sometime soon."

Watt was on target with some of the recent investor concerns with DKNG, although DraftKings (DKNG) recently tried to address the burning profitability question.

DKNG management said at an investor event in May that it remains confident in achieving near-term EBITDA targets and transition to EBITDA profitability in Q4 of 2023. The company noted that it has identified cost efficiency opportunities highlighted and already seen some fixed cost reductions across cost items like marketing efficiency and vendor renegotiations. DKNH thinks that there is a penetration cap for the sports betting industry and expects to cut absolute marketing dollars and average customer acquisition costs.

Shares of DKNG traded as low as $10.75 on Thursday vs. the 52-week high of $64.58.

The Seeking Alpha Quant Rating on DKNG flashed Strong Sell last November before a 70% drop in share price.

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