It’s been a champion play for bullish investors, but is DraftKings (NASDAQ:DKNG) still worth a wager? Let’s review what’s happening off and on the price chart for DKNG stock, then offer a risk-adjusted determination to beef up the odds and success while avoiding a truly bad beat.
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For online sports betting upstart DraftKings, 2020 has been a heck of a year to hang out its ‘Open for Business’ sign as a Nasdaq-listed company. With states legalizing collegiate and professional sports betting, the ease of virtual transactions and a wildly popular brand within fantasy sports leagues, what could possibly go wrong?
So far in October, DKNG stock is down more than 13% compared to a 6.3% increase in the Nasdaq Composite index.
DKNG Stock Thrived in Bubble
It’s not exactly a secret the novel coronavirus and ensuing fallout of Covid-19 pandemic tested the possibilities of what could be grimly possible as sports leagues across the globe were shuttered. But from the Bundesliga kicking off team play in late spring and other major leagues following suit the past few months with successful bubble tournaments and/or abbreviated sports seasons, sports are making a successful comeback despite the odds. And DraftKings has emerged as a winner.
That’s not to say betting on shares of DraftKings has been easy. And already more than a few investors have learned that lesson once or twice.
Unofficially, DraftKings was dealt a numbing hit when shares crashed 45% during the worst of March’s broad-based bearish correction. But that was before SPAC Diamond Eagle Acquisition merged DraftKings and gaming platform SBTech into today’s DKNG stock. And to be fair, even the market’s largest stocks and Covid-19 winners such as Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) were brought down onto their knees, not just back alley dealings.