DraftKings Stock Drops Over 5 Percent after Announcing Billion Dollar Convertible Debt Offering

Popular sports betting app DraftKings saw its shares take a dive of more than 5% on Monday following news that it would offer $1 billion in convertible debt offerings.

The private offering, which DraftKings announced early Monday morning, would be made to qualified investors. The money generated will be funneled into DraftKings’ general and capital expenditures, to include acquisitions and tech investments.

Prior to the news, DraftKings (DKNG) was trading at a near 52-week high at $73.03 a share. Stock prices took a dive of $4.00 to $67.75 (-5.57%), but are up this morning in premarket trades to $69.60 (+2.83%).

Shares of DKNG have seen a meteoric rise over the past 6 months, trading for just $34.90 in November 2020.  This hot streak is thanks to an optimistic earnings report in the fourth quarter of 2020, with shares in DKNG climbing 6% after the news. 

The company also raised its 2021 revenue projections by about $150 million following its earnings report, which many credit as the reason investors have started flooding in.

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