DraftKings CEO takes on Jim Chanos: Some people will say anything to make a buck
Dec. 03, 2021 8:28 AM ET
DraftKings Inc. (DKNG)
By: Brian Stewart, SA News Editor
DraftKings CEO Jason Robins shot back at high-profile short-seller Jim Chanos, accusing him of making unsupportable claims about the online betting platform in order to improve a bet he made that the company's stock would decline.
"Some people will say anything to make a buck," the head of DraftKings (NASDAQ:DKNG) told CNBC on Friday.
The remarks followed a CNBC appearance by Chanos the previous day, in which he detailed his short position in DKNG. In that interview, Chanos contended that even if the company quadrupled its top-line and dropped marketing expenses to 10% of revenue, it would still lose money at a pace of around $200M a quarter.
Robins disputed this claim directly, saying "the math makes no sense."
While he felt the need to push back against Chanos' specific charges, Robins said the company generally tries to ignore short-sellers.
"We're focused on the people who are believers and trying to go out there and our goal every day is to build a great company over the long term," he said.
"Obviously, it's annoying when people come and make stuff up and do that at their own service, but not much you can do about it," he added.
Commenting on its business, Robins repeated the company's assertion that it will reach profitability in each of the states where gambling is legal within 2-3 years of entry into the market.
He noted that the only state where it has operated long enough to test this thesis was New Jersey, with DKNG hitting profitability in a little after two years.
DKNG dipped as Chanos made his remarks on Thursday, but recovered by the close. The stock was basically flat on the day. However, shares reached a 52-week high before their rebound, toughing a trough of $30.41.
After hitting a multi-month high in early September above $63.60, shares have suffered a steady retreat for most of the last three months. Shares are down about 50% over that time, compared to a 3% advance for the S&P 500.
I use both Fundamental and Technical Analysis.
Opinions posted by me are just that, my opinion.
Buy/sell any type of financial security is the sole
decision of the individual. Make your own sound
judgement or consult a professional licensed
advisor.
