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Why DraftKings Stock was removed on Thursday

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What happened

DraftKings (NASDAQ:DKNG) was another casualty of the stock market’s no-hit Thursday. Investors seemed to have a particular disdain for companies that have flown high so far this year, and DraftKings — still up a staggering 255% so far, even after the day’s decline — is a prime candidate.

So what

Mr. Market was in no mood to rejoice over good news. It was too bad for DraftKings, because he had something very positive to report.

Image source: Getty Images.

The company announced it had landed the Chicago Cubs as the team’s “official sports betting and Daily Fantasy partner” in a multi-year deal, the terms and price of which have not yet been announced. been disclosed.

Ultimately, the company aims to set up a sportsbook – that is, a sports betting venue – right at the team’s hallowed home of Wrigley Field. Such a facility requires city government approval, even though gambling on sporting events is legal in Illinois, and the company already operates a sportsbook in the state.

Now what

It’s encouraging that the still-young DraftKings have managed to team up with such a big name in professional sports. It’s not the first time: The Cubs’ announcement comes on the heels of news that Michael Jordan will serve as a special adviser to the company’s board of directors.

So while DraftKings is certainly an expensive investment, especially given its sky-high valuations, the obviously determined and dynamic company didn’t necessarily justify the sell-off it suffered on Thursday.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.