Super Bowl Bull DKNG

I recently bought the dip/bottom on draftkings. First I was purely playing TA, but will try to hold over super bowl weekend. PENN didn’t have great earnings and fell short, but they recently got price upgrades to about $60-$65. There is an estimated over 1 billion in sports betting apps over the superbowl weekend and recently New York opened up online betting and set records within the first week and weekend. Now know draftkings earnings is on the 18th premarket. I will def ride this up over the weekend and sell Monday or Tuesday in hopes the weekend betting numbers pops this stock. I then will wait for earnings and reenter once we see how they do. Historically DKNG has had crazy high marketing costs and wasn’t very profitable. Also, with the main covid push being over, betting and user base has declined. Will need to dive into those numbers more once we see them report and earnings but this play mostly a technical, some playing off PENN moving up, and the superbowl/NFL season being the prized pig for sports betting apps and companies. Playing some longer out calls to play it safer, but mainly the 25 & 24 strike.

3 Likes

I bought the dip as well and sold yesterday for slight profit. I thought about holding longer but figured there would be another dip if the CPI report is bad and things drop. Will be looking for another buy in if there is another drop because I think this makes a lot of sense!

1 Like

MGM came out with good earnings so that makes this even more bullish. DKNG also follows SPY so remember that. I am looking if mgm reports any app betting numbers or if anyone sees them post here too.

4 Likes

Thanks for the DD on this, been also following along in VC a bit on it and did well scalping some calls today. Wanted to cash gang into CPI tomorrow and re-evaluate direction after that and timing but will definitely get back in some calls on this one.

1 Like

Interesting to note that the earnings whisper is actually a miss. This could add even more bullish momentum to this with good numbers out already from mgm and some nice betting statistics from after the sb weekend to potentially raise the whisper early next week?

Found the ER transcript on seeking alpha, couldn’t find any other doc’s from the Q4 call yet but will try and dig up more data tomorrow as time permits. Looks like they are forecasting for 52% growth YOY into 2022.

Moving to BetMGM. We’re currently live in 21 markets, having launched in both New York and Louisiana in January as well as Puerto Rico today. The team remains busy, that’s probably the understatement of the call, with expectations to go live in Illinois next month as well as Canada later this year. Adam and Gary from BetMGM provided a business update back on January 19, and during which they announced having delivered net revenue from operations of $850 million in 2021, growing nearly 5x over 2020. We expect the momentum to continue into 2022 with BetMGM expecting to deliver net revenue from operations of over $1.3 billion.

https://seekingalpha.com/article/4485700-mgm-resorts-international-mgm-ceo-william-hornbuckle-on-q4-2021-results-earnings-call

1 Like

I’ve been accumulating some 2/18 calls on the dips today, hoping to swing this overnight for a run-up up tomorrow with people FOMOing before the SB weekend. I’m also starting to accumulate some 3/18s to play into next week and may use any (dare I say) gains from tomorrow to average in. Keeping a close eye on my 2/18s and will cut them if we see any bearish trends before EOD but so far so good…

Edit: spelling

1 Like

Keeping an eye on the general market direction/sentiment today but thinking about adding some more March calls on a dip today, will probably scale back and may keep a small position into Monday/Tuesday

1 Like

I set this topic to close on March 26th. Not sure if everyone has ability to set timers when they make a post but this may help with reducing ones after plays are over and save the mods a ton of time. Will have to see how it effects the threads command conq created. However, SPY moving up this am and so is DKNG. Still showing good support at $23 so far.

3 Likes

Closing thoughts on this play. First off props to JB for bringing this ticker to our attention.

I ended up averaging down the entire day yesterday with the cash I put aside for this play. In hindsight buying all at close would’ve maximized my gains but I’m not sure how I would’ve ever seen that coming (counter thoughts here encouraged).

Since I started the day opening a little red on my options but knowing premarket was green and coupled with a work call starting at 9:30 I was “lucky” to close my positions on the first pop for a 10% gain.

If I had held for 20-30 more minutes I could’ve easily had 50%+ gains but SPY had me shook and I didn’t know how the day would go with “war news” on the headlines.

Overall I call this a win for me and I’m completely out going into next week. Best of luck to anyone still in.

I announced it in vc and in my alerts today but I closed my calls today on that run up. Not exact peak but, close as profit is great. Scalped a few times since callout but I like to sell before the event or on the run ups. Also once spy started dropping that was my sign. It’s possible they produce betting stats and DKNG runs at open on Monday but reminder fed meeting Monday later morning. I will reenter after market reacts to Monday meeting. Maybe late Monday or Tuesday later morning. If doesn’t trend well, might not play this anymore until next support buy. They also have earnings coming out very soon. Cover costs and take profit. Next week likely a wild ride and scalpers dream.

3 Likes

I believe it was Friday that @Machetephil mentioned “march madness” would likely result in a lot of betting too. I’m going to keep an eye on the news to see if they hype up sports betting for basketball like they did for football.

I exited too shortly after you did on Friday, but would like to get back in if it continues to be viable (depending on all the various factors you mentioned).

To that point, this is from a year ago but will be relevant this year as well:

https://www.thestreet.com/.amp/investing/draftkings-dkng-ncaa-tournament-march-madness-2021

Keep in mind the first weekend of the NCAA tournament is March 17-20, so April calls might be a safer play.

2 Likes

Might want to wait to enter until after earnings though, given how PENN did.

2 Likes

Yeah I think there will be a run up to and through the NCAA tournament and I’m specifically looking to play that.

1 Like

Closing this for now. Bought at bottom and sold today as well. Will keep watching this one but no position now.