Sunday, February 20, 2022by Ian Harvey
Draftkings Inc shares dropped 21.6% after reporting earnings on Friday, after the fantasy sports and online
betting company warned of larger losses in the coming year.
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Inc (NASDAQ: DKNG) shares
slumped lower Friday after posting stronger-than-expected fourth quarter
earnings but forecast a much wider loss over the coming year for the online
sports betting and gaming group.
shares fell after cautioning
that the company would generate adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA) loss of $825 million to $925 million in
2022, in part because of the expenses related to entering new markets in New
York and Louisiana. Analysts had expected an adjusted EBITDA loss of only $573
“In the present environment where
tech investors have displayed zero tolerance for large losses, the 2022 Ebitda
guidance is going to be a disappointment,” Vital Knowledge analyst Adam Crisafulli said.
adding to DraftKings Inc shares falling their most in almost two years as they
announced that the company added fewer new customers in the fourth quarter.
Inc said Friday that an average of 2 million monthly unique paying customers
engaged with the company during the fourth quarter. Analysts were looking for
2.1 million monthly payers.
said revenues for the three months ending in December rose 47% from last year
to $473 million as more states eased restrictions on online gaming. Marketing
and expansion costs, however, ate into the group's bottom line, which came in
at $128 million.
betting has spread to an increasing number of U.S. states since the Supreme
Court struck down a federal ban in 2018. That’s led to a free-for-all of
introductory offers as DraftKings, FanDuel and others try to persuade people to
use their phone to place wagers for the first time. DraftKings has entered the
New York and Louisiana markets, and said Friday there are new potential
opportunities in Maryland, Puerto Rico and Ohio.
relationships with new customers -- and sports leagues -- costs money.
DraftKings spent nearly $1 billion on sales and marketing last year, almost
double its allocation in 2020.
is far from profitable. It generated a net loss of $326 million in the fourth
quarter alone. Its adjusted loss per share of $0.35, however, was better than
the $0.81 per-share loss Wall Street had expected.
Read the article.... .“ Draftkings
Inc Earnings Expectations!”
DraftKings' report didn't live up to the higher expectations of its
shareholders, and that motivated the sharp decline in the stock price. That's
been an ongoing theme this earnings season, and it could cause further negative
sentiment about other high-growth stocks that have yet to release their latest
had already fallen 63% over the past year through Thursday’s close.
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