Markets

Why DraftKings Is Down 5% Today

What happened

Shares of online daily fantasy sports and sports betting company DraftKings (NASDAQ: DKNG) are down 5% today as of 2:45 p.m. EDT.

The company announced a new agreement with Turner Sports today, but there's other news that has investors spooked.

So what

The multi-year agreement with Turner Sports gives DraftKings exclusivity as the sportsbook and daily fantasy sports provider for all Turner Sports and Bleacher Report properties, other than NBA programming. Turner is the parent company of sports and sports culture website Bleacher Report.

But it's COVID-19 news out of NCAA college football that is likely moving the share price today.

football and helmet with facemask representing COVID impact on the game

Image source: Getty Images.

The near-term picture for DraftKings' business was impacted today when a COVID-19 outbreak on the University of Florida football team forced its high-profile game against LSU to be called off for this weekend. That postponement, along with the Cincinnati-University of Tulsa game, makes 30 games that have had to be rescheduled this fall, just seven weeks into the season. COVID-19 cases on the Cincinnati team forced that game to be delayed.

Now what

In addition to the college game postponements, Alabama coach Nick Saban also said he tested positive for COVID-19 yesterday, and won't be on the sidelines for his weekend game.

It was also announced today that the NFL's Atlanta Falcon's facility has been shut down after at least one positive result on that team.

All of this news puts the future of the season for both college and professional football into question. DraftKings is a growth stock that investors have valued based on its potential, rather than its current fundamentals. With this year's prospects of some sports leagues in question, it's not surprising that some investors are looking to sell first and see how things progress.

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