Why Is DraftKings (DKNG) Stock Down 10% Today?

A man opens the DraftKings (DKNG) app from his iPhone. DraftKings is an American daily fantasy sports contest and sports betting operator. DKNG Stock Forecast
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As markets continue to wade into negative territory, investors have little reason to feel bullish today. However, for investors in DraftKings (NASDAQ:DKNG) stock, there are even more reasons for concern right now. Earlier this morning, DKNG stock dropped over 10% on news that a number of customer accounts have been compromised.

Reportedly, this attack targeted an unknown number of accounts with sizable withdrawals. Users were locked out of their accounts, with the hackers changing both the login information as well as the account recovery information on file.

The extent to which this hack has been contained remains to be seen. DraftKings has noted that it is investigating the issue, with investors left to speculate as to how widespread the problem may be.

Let’s dive into what investors should make of DKNG stock in light of these reports.

Where Is DKNG Stock Headed From Here?

For an online gaming business like DraftKings, cybersecurity threats are always something to consider. But for investors, more concerns may arise from how DraftKings has handled the hack than the hack itself.

Reports that hacked individuals contacted DraftKings’ support team to no avail appear to have some investors particularly worried. Additionally, with little certainty as to whether the company has completely sorted out any security vulnerabilities, this uncertainty is being priced into DKNG stock.

It’s possible today’s dramatic decline in DKNG may be an overreaction to the news. However, more downside could be on the horizon. These issues may be more widespread than we currently know.

On the date of publication, Chris MacDonald did not hold (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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Article printed from InvestorPlace Media, https://investorplace.com/2022/11/why-is-draftkings-dkng-stock-down-10-today/.

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