![]() Remember, for all intents and purposes, Amazon was alone in the depth and breadth of its business frontally attacking the entire retail sector. The basic theory is that Bezos was happy to continue posting losses, ultimately convinced that when scale reached its mammoth size, that profits would follow. And two, as we have also pointed out in past SA articles, never count out Amazon ( AMZN) as a potential giant disrupter in the space.Īmazon's rise has been pointed to as a useful analogy to DKNG's future by bulls. One, persistent noises coming out of Walt Disney ( DIS) of a serious possibility that it sees sports betting as a revenue balance for its ailing ESPN unit. With at least 14 platforms already in its wild chariot race, what can be realistically expected for DraftKings as a share? Bear in mind, besides the existing platforms, we have not yet heard from two potential 600lb gorillas who might enter the space. ![]() Far more important is what share of that market will a given platform enjoy? ![]() The total market will indeed be sizable, probably somewhere between $25b and $30b before the end of the decade. A reality check is in order for DKNG at its current $39 rangeīelow: Never neverland projections still abound: Source: GAMįorget delusions about the size of the addressable "someday" market. And you remain glued to the pride and ego of believing in a huge bounce as we speak. You fell for the Emperor's Clothes vision that has vaporized. But for those who bought in during the madness at prices above $55, sorry. For whatever reason, good or bad, you came into the stock, made a great return and sold out, you deserve my congrats. So kudos for certain to those in early, out at or near the apogee of giddy pricing. ![]() Three years from now it may well be a far better story. The record now says DKNG is at best a $30 stock. He said: You are what your record says you are. Although there was little rationale to support the subsequent run-up that I saw, the admonition of famed NFL Coach Bill Parcells came into focus. I understood the palpable reality that just passed the DKNG SPAC transaction those who leaped into the stock cheaply saw great returns, fast and furious. There will always be time to jump in when or if the outlook brightens. There are better alternatives in the space. Sell if you bought anywhere near the high of $74. Hold if you own at or near current price or below. What I am saying is that the past is prologue and it's time to take an updated look at DKNG and register my view going forward for what it's worth or not worth. Unfortunately, it was, and is, dead wrong. He was among analysts continually pushing the DKNG story as a revenue now, profit later play. Jim Kramer reported last April that Needham had initiated coverage on DKNG with a $151 price target, asserting the addressable market potential that in our view was never-never land. Analysts were lining up with buy calls based on revenue growth, sector growth and predictions that DKNG would turn the corner on profitability soon. And it wasn't merely retail fans of the stock. These were the same self-appointed geniuses who were forecasting DKNG soaring to an absurd $200 a share. Getting trolled for my contrarian view did set the stage for me to publicly shred the happy talkers who were glorying in bidding up the price as high as $74 a share. This may sound like an I told you so crow to those DraftKings ( NASDAQ: DKNG) groupies and analysts who laughed at me for urging caution on their giddiness over the stock as it ran up past $60. Pride goeth before the fall… - From the Book of Proverbs
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