DraftKings Is Inching Towards Public Listing, Even Amid Crisis

DraftKings Is Inching Towards Public Listing, Even Amid Crisis

Even though the coronavirus pandemic outbreak is affecting its business significantly, DraftKings is moving ahead on its plan to go public.

Shareholders approve the move

The shareholders of Diamond Eagle Acquisition Corp., a special purpose acquisition company, approved the deal that merges DraftKings (SBTech) with the company and creates a single entity. According to the merger agreement, the combined company will be valued at $3.3 billion. This will help DraftKings go public without going through the IPO process. Diamond Eagle functions as a publicly-traded company that helps fund acquisitions using funds raised via public offerings.

DraftKings Is Inching Towards Public Listing, Even Amid Crisis

Diamond Eagle announced in March that it has received the Securities and Exchange Commission’s approval for the deal. When the deal is final, DraftKings will become Nasdaq-listed company and would be visible with the stock ticker “DKNG”.  It would go public with over $500 million in unrestricted cash on hand. The two companies are yet to decide on the closing conditions. Therefore, it is unclear when the acquisition will be final and DKNG will be available on Nasdaq.

DraftKings is taking big steps in the US

DraftKings is a daily fantasy sports company that has become one of the most prominent sports betting operators in the country. The striking down of PASPA in mid-2018 was instrumental in providing the company with a firm footing in the US market. It currently operates physical sportsbooks in Mississippi, New York, and New Jersey and has online betting offerings in other states. The company previously received investment from Jerry Jones, the owner of MLB team Dallas Cowboys.

The company’s decision to go public was unphased by the ongoing coronavirus pandemic which has shut down all sporting activity in the US and creating a major hurdle for sportsbook operators. In the past year, some highly precedented IPOs of major companies like Uber have fallen flat on their face. With the physical distancing norms in place, it is unclear when sports will make a comeback in the country.

According to Jason Robins, the CEO of DraftKings, the pandemic would not derail their plans. He added,

“On our end, I think the plans are the same. We don’t have a big physical presence. Being a digital company, obviously not having sports reduces the amount of content we have. But the types our team is working on, the products we’re working on, nothing much has changed there.”

Robins will lead the new combined entity.

About sherlock

Sherlock Gomes loves to write and express his views on anything related to Gaming, Gambling, & Casino. He has been covering Gaming for more than two years now.