The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Draftkings Inc. f/k/a Diamond Eagle Acquisition Corp. (“Draftkings” or the “Company”) (NASDAQ: DKNG) securities between December 23, 2019 and June 15, 2021, inclusive (the “Class Period”). Investors have until August 31, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On April 23, 2020, DEAC completed certain transactions (the “Business Combination”) through which DraftKings became a public company and acquired SBTech Global Limited (“SBTech”).
The lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose that: (i) SBTech had a history of unlawful operations; (ii) accordingly, DraftKings’ merger with SBTech exposed the Company to dealings in black-market gaming; (iii) the foregoing increased the Company’s regulatory and criminal risks with respect to these transactions; (iv) as a result of all the foregoing, the Company’s revenues were, in part, derived from unlawful conduct and thus unsustainable; (v) accordingly, the benefits of the Business Combination were overstated; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On June 15, 2021, Hindenburg Research (“Hindenburg”) published a report alleging that the Company’s merger with SBTech exposed DraftKings to dealings in black-market gaming. Citing “conversations with multiple former employees, a review of Securities and Exchange Commission and international filings, and inspection of back-end infrastructure at illicit international gaming websites,” Hindenburg alleged that “SBTech has a long and ongoing record of operating in black markets,” estimating that 50% of SBTech’s revenue is from markets where gambling is banned.” On this news, DraftKings’ stock price declined by $2.11 per share, or approximately 4.17%, from $50.62 per share on June 14, 2021 to close at $48.51 per share on June 15, 2021.
If you purchased or otherwise acquired Draftkings securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.