I for one, truly believe in the sports gambling market. I am very new to trading, having only bought my first few stocks about a month or 2 ago. When DraftKings launched their IPO on the 24th of April, although I am new to the stock market, I saw potential. Opening at $10.04 its first day, the stock surged up to $19.35, nearly an 11% gain in its first day as a publicly traded stock. Why do I believe this is a great stock to buy right now in this market and the current state of the economy? Due to the global pandemic that is currently ravaging most of the world, DKNG still gained 11% in its first day, even while there are no professional sports being played. If this stock is at $21 as I write this, and as there are no sports being played, that should hint at something big coming for DKNG when professional sports continue. I see this stock going into the $100's as soon as sports pick up again, and I hope i'm right! once again, I'm just a rookie at the stock market game, but I genuinely beleieve in the growth and sustainibility in DraftKings, as a company, and a stock.
Comment
⋅
it had a nearly 92% gain the first day* sorry about that
Since as you say, "only bought my first few stocks about a month or 2 ago." It would benefit you to read up on what a Price-to-Earnings ratio means, as well as other standard business valuation metrics.
This stock could fall 90% and STILL be considered expensive. And that is based on their pre-coronavirus earnings. With sports cancelled their earnings are going to drop A LOT this year, which will drive their P/E ratio even higher than the current insane 400+ level.
Hi Justin, The reason draft kings is up is because Disney bought a 3% stake in their company. Also sports were still being played on 12/20/2020 when they had their initial public offering.
Be careful investing in new stocks as they can get hit pretty hard.
laingdou
⋅
@st0nkz, That is true but I would foresee sports coming back to some capacity this year. Now, admittedly it will take a hit (perhaps very hard at first ) but I think a long hold on this company will be very beneficial in the upcoming years.
Stocks_and_blondes
⋅
@st0nkz, but the Disney stake was only by accident, right? Only because they were buying a part of Fox that happened to own a portion of DKNG? That's what I got out of the article.
Malongs
⋅
Its fun reading comments nearly a year later when after Draft Kings has had an amazing year. GGs brother
Stocks_and_blondes
⋅
My first day here. Seems like a cool site. My question is this: Will this stock long term (when things get back to normal and they will) trade like an AMZN with high P/E, pay no divvy or will it trade like a T and low p/e and pay a fat divvy? Because isn't this just a bunch of servers so no overhead so should't have any debt and will be sitting on a lot of cash? I'm in at 19.10.
RobBiddle
⋅
Also, your math is wrong. $10.04 to $19.35 is a 92.7% increase.
This stock could fall 90% and STILL be considered expensive. And that is based on their pre-coronavirus earnings. With sports cancelled their earnings are going to drop A LOT this year, which will drive their P/E ratio even higher than the current insane 400+ level.