U.S. analysts are closely watching DraftKings developments in the midst of global COVID-19 disturbances as the DFS and sportsbook operator pursues their 2020 plan of listing on the U.S. Nasdaq exchange this April.
The firm issued the following statement Thursday morning which reads: “We are pleased that our registration statement was declared effective by the US Securities and Exchange Commission this morning, which brings us another step closer to our goal of becoming a public company in April.”
DraftKings has entered the final step of combining with betting device provider SBTech, creating a new $3 billion company backed by LA sports and entertainment private equity firm Diamond Eagle Corp. The merger, which will form ‘DraftKings INC,’ was led by Hollywood magnates Harry E Sloan and Jeff Sagansky spearheading the reverse takeover offer by Diamond Eagle.
Diamond Eagle, a PE fund listed on the US Nasdaq, is expected to host its shareholder vote on April 23 to finalise its contract, green lighting the ambitious three-way tie-up.
Prospects for merger will see DraftKings expand its ‘leading B2C’ profile across all controlled market states, fuelled by SBTech technology systems, becoming ‘the first vertically integrated pure-play sports betting and online gaming company based in the United States.’
The ambitious masterplan of DraftKings will be sponsored by Diamond Eagle to secure $500 m in working capital and raise funds via a crucial 2020 IPO.
Sloan and Sagansky’s blueprint will however be checked by the desperate conditions faced by all market investors battling COVID-19 headwinds, should DraftKings retain its April IPO position.
With all U.S. pro leagues suspending their schedules under lockout, investors are likely to doubt whether a DraftKings IPO soothes consumer appetite amid awful regular economic forecasts under which all U.S. businesses try to recapitalise their share prices, avoiding the conditions of the bear market.