DraftKings Faces Technical Setback Ahead of Q3 Earnings
DraftKings Inc (NASDAQ:DKNG) has experienced a sharp decline, with its stock dropping nearly 20% in the past month. This downturn comes as the sports-betting company prepares to release its third-quarter earnings report on Thursday after market close.
Billionaire Investors Suffer Significant Losses
Billionaire investors Ken Griffin and Cliff Asness have been hit hard by the recent decline. Citadel's Ken Griffin increased his stake in DraftKings during the second quarter and currently holds 8.07 million shares valued at approximately $346 million, purchased at an average price of $38.53. At the current price near $28.11, Griffin faces an estimated 25% loss.
Similarly, Cliff Asness of AQR Capital raised his position by over 50% to 7.15 million shares, worth $306 million at an average cost of $36.30 per share. With the stock trading just above its 52-week low of $28.04, Asness is also significantly underwater.
Market Expectations and Technical Indicators
Wall Street anticipates DraftKings to report an EPS loss of $0.40 per share on $1.23 billion revenue in the upcoming earnings. Meanwhile, a key technical indicator known as the Death Cross has emerged, where DraftKings' 50-day moving average ($38.63) dropped below its 200-day moving average ($39.60). This pattern often signals a prolonged bearish trend ahead.
"DraftKings stock has tumbled nearly 20% in a month, just as the sports-betting giant prepares to report its third-quarter earnings."
"DraftKings' 50-day moving average ($38.63) has fallen below its 200-day ($39.60) — a textbook Death Cross that signals sustained bearish momentum."
Traders should prepare for increased volatility as DraftKings approaches its earnings release, reflecting both fundamental and technical challenges.
Author's summary: DraftKings' stock decline and the emergence of a Death Cross have caused major losses for key billionaire investors, signaling potentially tough times ahead as Q3 earnings approach.