Shares in DraftKings are up 4% in Wednesday’s morning trading after the US sports betting company announced that Michael Jordan is joining its board of directors.
Shares increased to $38.42 in morning trading as Draftkings (DKNG) said that Jordan, a member of the National Basketball Association Hall of Fame, will serve as a special advisor to the company’s board of directors. Moreover, Jordan has agreed to take an equity interest in DraftKings. In exchange, he will provide guidance and strategic advice to the board on key business initiatives by the sports technology and entertainment company that went public earlier this year.
“Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur,” said Jason Robins, DraftKings CEO. “The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team.”
As a special advisor, Jordan will provide strategic and creative input to the board of directors on company strategy, product development, diversity, equity, marketing activities and other key initiatives. His position as special advisor to DraftKings’ board of directors is effective immediately, the company said.
DraftKings is the official daily fantasy partner of the NFL, MLB and the PGA TOUR as well as an authorized gaming operator of the NBA and MLB and an official betting operator of the PGA TOUR.
Meanwhile, Morgan Stanley analyst Thomas Allen last month downgraded DKNG to Hold from Buy, saying that the sports betting industry has become more competitive, “with numerous peers raising capital and operators looking to take first-mover advantage, so near-term losses could be much higher than expected.” Allen lifted the stock’s price target to $37 from $26. (See DraftKings stock analysis on TipRanks).
“While we think a lot of the increased value is valid, we are concerned investors’ expectations are too high,” Allen wrote in a note to investors adding that he also sees various risks to the upcoming NFL season that could be canceled due to COVID-19 related concerns.
Allen lifted the stock’s price target to $37 from $26. Overall, DKNG boasts a Strong Buy analyst consensus with a more bullish average analyst price target of $47.73 (24% upside potential) even as shares are up 260% year-to-date.
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