Might DraftKings Be the Subsequent Meme Inventory?
The WallStreetBets Reddit discussion board is eyeing one other inventory for its rising listing of probably the most shorted shares. Sportsbetting web site DraftKings is stumbling in in the present day’s buying and selling with, the inventory down nearly 5%. The explanation for the declines has positioned one other goal on short-sellers.
The sell-off in DKNG was triggered by a brief place within the inventory introduced by Hindenburg Analysis. DraftKings went public by way of a SPAC in 2020 earlier than blank-check offers have been all the craze. Shares are nonetheless up 9% for the yr, however traders fled the inventory on the heels of Hindenburg’s disclosure.
This piqued the curiosity of the WallStreetBets crowd, who’re questioning if there’s a brief squeeze within the making and earnings available within the inventory. Hindenburg says DraftKings’ ways are “questionable,” accusations that weren’t misplaced on the Reddit investor bunch who couldn’t ignore the irony.
Isn’t It Ironic?
In its report, Hindenburg Analysis dissected the DraftKings enterprise mannequin, alleging that the corporate is concerned in:
- “black market gaming”
- “cash laundering”
- “organized crime”
The activist investor factors the finger at tech supplier SBTech, which is the entity with which DraftKings merged to go public. Hindenburg’s due diligence concerned discussions with firm alum, regulatory filings and web analysis.
The Reddit crowd is crying foul, saying first that it’s no shock that “the playing enterprise is shady, to start with” and calling the hedge funds out for their very own unscrupulous buying and selling methods.
Whereas retail traders could have made DKNG the most recent object of their affection, the inventory was nonetheless below stress for the day, although it trimmed its 8% declines throughout pre-market buying and selling by half. If the Reddit crowd is as relentless with DraftKings as they’ve been with GameStop and AMC Leisure, Hindenburg Analysis may need to tread frivolously.
Meme Inventory Replace
The promoting stress has spilled over to main meme inventory GameStop, whose shares are down almost 7% in in the present day’s session. The inventory has superior greater than 1,000% year-to-date, so traders may simply be taking some earnings.
In the meantime, film chain AMC has been oscillating across the USD 60 degree as traders proceed to drive the inventory value larger. Immediately’s features of almost 5% are indicative of bullish momentum that has been dominating the inventory for the previous few classes as retail traders hold the squeeze on short-sellers.