DraftKings recently went public, and their stock has been doing well since release. But it took a plunge on Monday after the announcement that the Marlins had a group of players test positive.
Much of the DraftKings stock success has to be because of the realization that sports will be coming back. People can foresee them doing well after the suspensions related to COVID-19 stop. The stock nearly doubled since investors were betting on the reemergence of sports.
But because of the outbreak in Miami, there is a threat that the MLB will have trouble finishing the season. The stock dropped as much as 12.8% on Monday after the news was released.
Games have been going well, and it’s been nice having baseball back, but this is the worst-case scenario.
“The members of the Marlins’ traveling party are self-quarantining in place while awaiting the outcomes of those results,” an MLB spokesperson said.
Not only will the Marlins be tested, but the Phillies as well. Philadelphia just got done playing a series against Miami, so their game against the Yankees on Monday was postponed.
Other Sports Leagues
Miami’s cases could be an unfortunate foresight to what other leagues might experience. If this were to happen in the bubble, would the NBA continue to play?
This group of positive tests has more questions than just baseball. If this is any indication, it might be more stringent than some people thought to pull off sports in the current state.
It’s no secret that football is the big money-maker for DraftKings. The NFL does well on the platform, through betting and fantasy games.
With every occurrence like the one in Miami, the forecast for the fall becomes a little more questionable. In a perfect world, many of these issues will be solved, and the NFL can continue in the best way possible.
How They Survive
The company runs a lot smoother when sports exist, but DraftKings is determined to keep fans playing on the platform.
“While our business in the short term is partially dependent on the sports calendar, we have always said we are playing the long game. We will continue our focus on driving a technology-first approach to product innovation to keep sports fans engaged,” a DraftKings spokesperson told Business Insider.
They didn’t do as well without sports, but they managed to do ok when the outbreak began in March. Fans were playing fantasy esports 50 times more than usual. They also have virtual matches for the NFL in Madden.
Fans will find a way to stay entertained, even if everything gets canceled once again. Hopefully, this is an isolated incident that doesn’t happen again. But baseball has a long road ahead, as well as every other league making a return.
The stock may take a hit, but DraftKings will make it through. People were surprised how well they did in March and April, so they have the tools to make it past these hurdles that may be encountered.