Over the past year, anyone who took a position against sports betting and i-gaming company DraftKings (NASDAQ:DKNG) probably suffered major losses. Even with the novel coronavirus putting a damper on sporting events, the DKNG stock bulls took the ball and ran with it, so to speak.
Sure, there were dips along the way in the DKNG stock price. Yet, those corrections were short-lived and presented prime buying opportunities.
Even highly successful companies will have skeptics and doubters. Some folks might claim that DKNG stock has run too far, too fast. Or, perhaps the critics simply aren’t aware of DraftKings’ ambitious plans to dominate the sports-betting domain.
But remember, just because the DKNG bulls enjoyed a fantastic year, it doesn’t mean that the good times are over and done with. So, let’s keep our eyes on the ball as we now focus on the ups and downs of DKNG stock.
A Closer Look at DKNG Stock
As InvestorPlace contributor Ian Bezek points out, DraftKings was among the first special purpose acquisition companies (SPAC’s) to make a big splash in 2020.
In a stunning run-up that might have bankrupted some short sellers, DKNG stock quadrupled from its initial $10 offering price in 2020. On the year’s final trading day, the share price settled at $46.56.
Did the onset of the coronavirus help or hinder DKNG stock? The answer is, mostly it seems to have helped the bulls. Remember, DraftKings has an i-gaming segment that was able to thrive while people were stuck at home during the lockdowns.
On the other hand, DraftKings’ business also depends on live sporting events taking place. Fortunately, professional sports leagues are running again, at least to a certain extent.
With that in mind, the bulls should aim to recover DKNG stock’s 52-week high of $64.19. Helping the bull thesis is a number of value-added deals that should stand DraftKings and its stakeholders in good stead in 2021.
Teaming Up with Teams
It’s indisputable that DraftKings established itself as a strong competitor during 2020’s third quarter. In that time frame, the company’s revenues increased by a whopping 42% on a year-over-year basis.
That’s even better than the already high Wall Street forecast of 31% year-over-year revenue growth. Yet, even with that, DraftKings can’t afford to rest on its laurels in a competitive market.
In order to further establish its industry foothold, DraftKings is continuously collaborating with a number of high-profile sports organizations.
Not long ago, for instance, the company struck a deal with the Detroit Pistons to make DraftKings the team’s exclusive Official Daily Fantasy Sports Partner. DraftKings will also be an Official Sports Betting and iGaming Partner of the Pistons.
Enhancing Visibility
Why is this partnership significant for DraftKings? Detroit Pistons Chief Business Officer Mike Zavodsky explains, the collaboration will enable the popular sports team to utilize its platform “to help DraftKings grow their presence and connectivity to Pistons fans and to the greater Metro Detroit communities.”
In other words, the partnership will enhance DraftKings’ visibility among sports fans. Teaming up with the Pistons in this way is a savvy move that bodes well for DraftKings and the company’s stakeholders.
And this certainly hasn’t been DraftKings’ only sports-centered collaboration. In December, the company announced a multi-year deal wherein DraftKings will serve as the Official Daily Fantasy Sports Provider and an Official Sports Betting Operator for the Nashville Predators.
Don’t get me wrong – not every one of DraftKings’ recent deals is focused on sports teams. For example, in December the company entered into a deal with the Mashantucket Pequot Tribal Nation to potentially become the official daily fantasy sports partner of the Connecticut-based Foxwoods Resort Casino.
The Bottom Line
There’s no denying that the DKNG stock bulls scored a touchdown in 2020. However, 2021 is a new game and Covid-19 is still a factor.
Nevertheless, DraftKings is cementing its leadership position through a series of notable deals. These collaborations should help the DKNG stock holders to score big-time in the coming year.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
