DraftKings (NASDAQ:DKNG) stock is falling on Tuesday after the company was the target of a recent research note from short-seller Hindenburg Research.
The research note hitting DKNG stock today claims that the company has connections to the black market. The research firm goes as far as to say that the company uses its business to mask money laundering and black-market betting.
DraftKings went public last year through a three-way special purpose acquisition company (SPAC) merger with Diamond Acquisition and SBTech. According to Hindenburg Research, roughly half of SBTech’s revenue from 2020 came from “black or unregulated markets,” reports TheStreet.
Here’s a section of the Research note, as obtained from TheFly.com.
“We think DraftKings has systematically skirted the law and taken elaborate steps to obfuscate its black market operations. These violations appear to be continuing to this day, all while insiders aggressively cash out amidst the market froth.”
While there are concerns about the report, some analysts aren’t seeing it as a major blow. Credit Suisse analyst Benjamin Chaiken believes that even if SBTech’s revenue weren’t there to add to DraftKings’ own, the company would be fine. He says the acquisition of SBTech had more to do with its platform than its revenue stream.
DKNG stock is experiencing heavy trading today on the Hindenburg Research report. As a result, more than 47 million shares of the stock have changed hands today as of this writing. That’s quite the increase compared to its daily average trading volume of 16.1 million shares.
DKNG stock was down 4.2% as of Tuesday morning but is still up 8.1% since the start of the year.
Investors that are looking for stocks on the rise today will want to keep scrolling.
InvestorPlace is already knee-deep in the stock market today with plenty of coverage. That includes the latest news affecting shares of Alfi (NASDAQ:ALF), ContextLogic (NASDAQ:WISH), and Torchlight Energy Resources (NASDAQ:TRCH). You can learn what has these stocks on the move at the links below!
More Stock Market News for Tuesday
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- TRCH Stock: 2 Big Reasons Torchlight Energy Is Rocketing Higher
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.