DraftKings Inc is set to raise a further $600m from the new share placement announced earlier this week, after further details were released.
The Boston-headquartered business said the 32 million new shares will be available at a public offering price of $52.00 per share for a total offering size of $1.66bn (£1.29bn/€1.41bn).
That figure is significantly more than the $1.03bn proposed maximum aggregate offering price stated on Monday (5 October).
DraftKings, which intends to use the net proceeds it receives from the offering for general corporate purposes, will sell 16 million shares of its Class A common stock. Certain selling stockholders of DraftKings – including SBTech founder Shalom Mekenzie – will also sell 16 million shares of Class A common stock.
Credit Suisse and Goldman Sachs are underwriting the share sale.
Monday’s share placement announcement has led to a dip in DraftKings’ share price, which had hit an all-time high last Friday of $63.78. The share price was down to $52.49 at the start of trading on Wednesday (7 October). DraftKings shares were worth just $10.68 when they were first traded in July 2019.
In its prospectus for the share placement issued earlier this week, DraftKings said its priorities are to continue to invest in products and platform; launch in new geographies; effectively integrate with SBTech to form a vertically integrated operation, and expand its consumer offerings.
DraftKings said it expects to announce significant year-on-year increases in revenue when it publishes its Q3 2020 results later this month. In the unofficial figures, it said revenue increased by approximately 97% to between $131m and 133m for the three months to September 30, with the year-on-year rise at 41% on a like-for-like basis.
It added that its online sports betting handle for the period is expected to have grown approximately 460%. Online casino handle for the three months is expected to have grown approximately 335%.
DraftKings Inc was created earlier this year when Diamond Eagle Acquisition Corp acquired DraftKings for $2.10bn and SBTech for €590m ($634.1m). The deal was announced in December 2019 and completed in April 2020.