DraftKings plans to raise $567m from US public offering

DraftKings has announced plans to launch a public share offering in the US.

The daily fantasy sports provider turned sports betting giant, DraftKings, has announced plans to launch a public offering of new shares in the US with the intention of raising $567m.

The public offering

The new public offering will include 14m shares of new Class A common stock, with existing shareholders set to sell an additional 19m shares.

Credit Suisse Securities LLC and Goldman Sachs & Co. LLC will act as joint book-running managers and representatives of the underwriters for the public offering, which is still subject to market conditions.

Stockholders that sell may also grant the underwriters a 30-day option to buy up to an additional 4.95m chares of Class A common stock.

DraftKings said it will use any proceeds from the sale of its common stock for general corporate purposes. It will not receive any proceeds from the sale of stock from existing stockholders.

Shareholders that plan to sell

Several stockholders are looking to sell stock including Shalom McKenzie, the founder of SBTech. McKenzie is set to make 3,661,990 shares (9.3% of his overall holding) available as apart of the offering. SBTech’s former chief executive Richard Carter is also set to sell 94,913 shares.

Robert Kraft, chief executive of the Kraft Group and owner of the NFL’s New England Patriots will also sell 339,199 shares. Ryan Moore, of DraftKings’ first investors, will make 1m of his shares available.

NHL Enterprises, a subsidiary of the NHL, will make 51,093 of its shares available. Legendary Hospitality, which was founded by Jerry Jones, owner of the NFL’s Dallas Cowboys, aims to sell 20,437 shares.

Madison Square Garden Investments will also aim to sell 154,510 of its shares. This company is owned by the Dolan Family which also owns the NBA’s New York Knicks and the NHL’s New York Rangers.

Why sell shares now?

The redistributed shares effectively allow early investors in DraftKings to cash out early following a massively successful market debut.

DraftKings stock debuted on April 23 on the Nasdaq at just over $17 per share, after the sports betting company merged with SBTech.

In June, DraftKings stock hit an all-time high of $44.79 despite the lack of sports betting activity due to the coronavirus pandemic.

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