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DraftKings sees stock slump after year of setbacks

DraftKings' Q3 earnings report showed revenue of $213M, which was lower than expectedGETTY IMAGES

DraftKings CEO Jason Robins has "faced a run of bad luck this year that's cut his company's stock price in half since March," according to a front-page piece by Aaron Pressman of the BOSTON GLOBE. Everything was "on track" for most of '20 and the first part of '21. But it has been "largely downhill since then," and now Robins and DraftKings "face the most challenging period of the business." Spending to acquire customers in a fiercely competitive market is "generating huge losses, securities regulators are investigating fraud accusations, and even a streak of football favorites winning has gone against the company." Robins and his team are now "dealing with a series of setbacks." The first "major blow" came in June, when Hindenburg Research, a Wall Street firm known for betting against stocks, said that it "shorted DraftKings stock and accused the company of acquiring a Bulgarian gaming software company that flouted gambling restrictions in Asia." In August came news that the SEC was investigating. The next miscue happened in September, when a securities filing from British gambling concern Entain, which runs online services and owns chains of betting parlors, "revealed Draftkings' interest in a $22 billion takeover." DraftKings spent $703M in the first nine months of the year on marketing. The "latest blow" came in DraftKings' Q3 earnings report last month, with "revenue of $213 million," which was "lower than expected, and a loss of $314 million, which was larger than expected" (BOSTON GLOBE, 12/6).

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