Disclosure: I own stock and LEAPS
There are a few catalysts that could drive the price in both directions, hard to say where but i will share the info.
– H1 and Q2 2021 will beat H1 and Q2 2020 due to Covid and new state launches but will not smash Q1 2021.
– They lost market share in many states and they also had lower margin
– igaming (online casino) did ok but no spectacular growth there
– MI might help as they launched at the end of Jan so that gives them now a full extra month to compare vs Q1
I would not be surprised if revenue grows by single digit or low two digits vs Q1 2021.
2. Things I don’t care about:
– New marketplace and social features – these do not drive growth.
3. What they will say and what actually matters:
– They completed the migration from Kambi a few weeks ago with no real issues, going forward they can save 2-6% out of the sportsbetting revenue as they will not pay a platform fee. Also they will be able to build more features and they own their own stack.
– They launched Same Game Parlay and that will help them with margin. All of their main competitors have this and DKNG has been suffering from this gap.
– New States: Arizona and Connecticut will launch this year, CT will be meaningful as it has also igaming and it’s a two horse market, them and FanDuel.
– NY: they will announce that they will take part in the NY RFA and that they believe they will get a license. The results will be announced in December and I believe it will give the stock a boost, even if only temporary.
– Canada: Ontario passed a bill and they are well set to launch as soons as the market opens, using their own (SBTech) platform
The above points should drive revenue growth, cost savings and higher margin.
What will happen tomorrow?
-I have no idea but this is my play:
-if the stock goes up to $53-54 i will sell most of my positions as i think the price is already inflated.
-if the stock goes down, I will buy calls for Jan and Feb banking on the NY news.
What is your play?
Edit: q2 https://draftkings.gcs-web.com/static-files/3b07ad86-abb6-4287-81d7-d620ba9d39bb
I was right in all points. Even that q2 will not beat q1.