DraftKings (NASDAQ:DKNG) has been an extremely successful investment for those who got in early, but could the company still have plenty of upside in the years ahead? In this Fool Live video clip, recorded on Sept. 13, Industry Focus host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why the gaming stock is on their radar right now.
Jason Moser: Speaking of companies making big moves and paying off, I’m going to be digging more into DraftKings here in the coming weeks. Ticker there is DKNG. Now Matt, correct me if I’m wrong, you and I have talked about this earlier. DraftKings is literally one of, if not the most successful SPAC offering out there right now. In a world where SPACs have had a little bit of a tough time here recently, DraftKings is a SPAC that really has worked out pretty well for investors.
Frankel: Yeah, it’s one of the most successful SPAC mergers of all time, I believe if not the most. I’m not sure if it’s deemed most successful, but it’s definitely made certainly investors a lot of money.
Moser: Yeah, it feels like it has and stock is up around 30% year-to-date, is outperforming the market. But really, football season is now fully underway and I think we’re starting to see the dominance fall as more and more states incorporate sports betting into the fall there, which I think is a great thing. Of course, you want folks to use these platforms responsibly, but by the same token, they are ultimately in other form of entertainment which we know is a very big market opportunity in its biggest picture sense. I think this is a fascinating business from a number of angles and I really want to learn more about what their ultimate goal is. There’s a lot of consolidation going on in the space right now. From a finance perspective, you see the number of different ways you can fund these accounts, whether it’s your card or whether it’s PayPal (NASDAQ:PYPL) or e-checks from your bank and that certainly plays into all of the different types of companies that we’re following as well here on the show. Another thing I saw which was pretty interesting and this isn’t really DraftKings specific, but it’s NFL specific. This was a tweet I saw from Dan Kaplan a couple of days back, where right for the season started 29 of 30 NFL stadiums will be fully cashless this season. The only exception there is going to be Soldier Field in Chicago. But this is something that happened very quickly. Remember just a couple of years ago it was a noble idea to see a stadium go cashless. Now, it seems like they’re all doing it. Probably the pandemic had a little bit to do with hastening that, but you and I, we’ve also spoken about this. I’m not so sure. If I’m a business, I feel like I still want to accept cash. I want to open my doors to the biggest customer base possible.
Frankel: Yeah. I would agree with that. I was at the football game last weekend and the cashless things nice and convenience keeps the lines moving faster in a lot of ways, but it was inconvenient to not be able to pay for a bottle of water with the cash that’s in my wallet. I have mixed feelings on it.
Moser: Yeah. I think I ultimately, personally, I tend to like to pay for things digitally, but everyone knows I get a couple of bucks in your pocket, it’s nice to be able to use them, but I guess we’ll see how that all shakes out, but I’ll be digging more into DraftKings here in the coming weeks, learning a little bit more about that business, ultimately, what their long-term decision is, because it really does feel like with the doors opening up now toward not just sports betting, but really gaining in general. There’s going be a lot of opportunity out there for some of these big players in the space and DraftKings and certainly one of if not the biggest in the space.
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