DraftKings Ups the Ante in Secondary Offering
DraftKings is moving forward with its secondary offering, but it will be upsized from the previous announcement.
DraftKings Inc. (NASDAQ: DKNG | DKNG Price Prediction) is moving forward with its secondary offering, but this time it will be upsized from the last announcement. Often, if stock have made incredible runs, the companies will pursue secondary offerings to capitalize on these gains and raise funds to expand the business further.
The DraftKings offering now consists of 40 million shares, with 16 million coming from DraftKings and 24 million offered by certain selling stockholders. Additionally, the underwriters have the option to purchase up to an additional 6 million shares. Previously, the offering was only for 33 million shares, with DraftKings selling 14 million and the selling stockholders offering 19 million.
The company has priced the offering at $40 per share, which would value the total offering size of $1.6 billion.
The underwriters for the offering are Goldman Sachs, Credit Suisse, Morgan Stanley, BofA Securities, UBS Investment Bank, Canaccord Genuity, Cowen, Craig-Hallum and Northland Capital Markets.
DraftKings intends to use the net proceeds it receives from the offering for general corporate purposes.
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Here’s what a few analysts had to say about DraftKings going into the secondary:
- Craig-Hallum has a Buy rating.
- Northland Securities has a Buy rating.
- Oppenheimer has an Outperform rating and a $48 price target.
- Susquehanna Bancshares has a Buy rating with a $48 price target.
- Canaccord Genuity’s Buy rating comes with a $50 price target.
- Cannonball Research has a Buy rating and a $35 price target.
- Goldman Sachs rates it as Neutral with a $32 price target.
DraftKings stock traded at $41.03 on Friday, in a 52-week range of $9.76 to $44.79. The consensus price target is $43.88.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
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