DraftKings (NASDAQ:DKNG) stock is caught up in a whirlwind lately after Hindenburg Research launched an attack on it yesterday.
That attack claimed that the company was involved in some less than noble efforts to make money. That includes claims that it generates revenue through illegal gambling and that it takes part in money laundering.
While that report pushed DKNG stock down in early trading, it didn’t last long. Retail investors soon rallied behind the stock. That’s no surprise since Hindenburg Research is a known short-seller and Redditors love to squeeze shares targeted by such investors.
InvestorPlace’s own Luke Lnago believes that DraftKings will weather this attack with ease. He points out that the alleged black market dealings only make up a small portion of DKNG’s revenue. On top of that, they likely won’t remain black market for long as more states legalize sports betting.
What do analysts think about DNKG stock?
Many are rallying behind the company to support it after Hindenburg Research’s report. Morgan Stanley points out that the company’s dealings are more in the gray market, which is allowed by the New Jersey Division of Gaming Enforcement.
Jefferies is also on DKNG’s side. The firm’s analysts believe that SBTech, the source of Hindenburg Research’s complaints, was acquired not for its revenue but its technology platform. It still maintains a buy rating on the stock.
Finally, you have to take into account Cathie Wood’s ARK Invest. When the Hindenburg Research report hit the stock, her ETFs picked up a total of about 870,300 shares of DKNG stock, reports Seeking Alpha.
DKNG stock was up close to 1% when markets opened on Wednesday morning.
There’s plenty of other hot market news for investors to dive into below.
Trading has barely begun and there’s already much to talk about. That includes what’s happening with Chinese electric vehicle (EV) stocks, why Arrival (NASDAQ:ARVL) is being targeted for a short squeeze by Reddit, and the biggest pre-market stock movers this morning. You can find all that info in the following links.
More Wednesday Stock Market News
- Chinese EV Stocks: Why XPEV, NIO, LI Stocks Are Hitting the Brakes Today
- ARVL Stock: Why Redditors Are Betting on a Short Squeeze for EV Maker Arrival
- Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Wednesday
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.