DraftKings merged with special purpose acquisition company Diamond Eagle Acquisition, which trades on Nasdaq. The other party to the deal is betting-technology provider SB Tech.
The offering comes at a time when live sports across the globe are shut down due to the coronavirus pandemic, but DraftKings co-founder and CEO Jason Robins said e-sports and reality TV shows have drawn interest from gamblers who would otherwise bet on sports.
“That’s a temporary thing,” Robins said. “And as long as our customers continue to engage with us, people will be eager to reactivate when sports do come back. We always have people deactivate at the end of the NFL season, reactivate at the start of the season, so there’s always a seasonality to it anyway.”
The deal values DraftKings at $3.3 billion, and Robbins said the company has about $500 million in cash on hand. Diamond Eagle Acquisition Corp. raised $400 million in its offering last May, funds that DraftKings can now draw on.
“If this were a traditional IPO, forget ringing the bell, I don’t even think we’d be able to close the transaction,” Robins said. “This way, we close the transaction and put another half a billion dollars on the balance sheet at a time when it’s not very easy to raise money. I hope people view this as an innovative thing we did, much in the same way I hope people view us as innovative on the product side.”
The company began trading on Friday under the ticker DKNG. Shares were up 15%in the first 30 minutes of trading.