San Diego, CA -- (SBWire) -- 07/13/2021 --An investor, who purchased shares of DraftKings Inc. (NASDAQ: DKNG), filed a lawsuit over alleged violations of Federal Securities Laws by DraftKings Inc. f/k/a Diamond Eagle Acquisition Corp.
Investors who purchased shares of DraftKings Inc. (NASDAQ: DKNG) have certain options and for certain investors are short and strict deadlines running. Deadline: August 31, 2021. NASDAQ: DKNG investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.
Boston, MA based DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States. It operates through two segments, Business-to-Consumer and Business-to-Business. DraftKings Inc. was incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of its legal predecessor, DEAC, a special purpose acquisition company, or SPAC.
On April 23, 2020, DEAC consummated transactions contemplated by a Business Combination Agreement (the "Business Combination") dated December 22, 2019, as amended on April 7, 2020, and, in connection therewith, (i) DEAC merged with and into the Company, whereby the Company survived the merger and became the successor issuer to DEAC, (ii) the Company changed its name to "DraftKings Inc.," (iii) the Company acquired DraftKings Inc., a Delaware corporation ("Old DK"), by way of a merger, and (iv) the Company acquired all of the issued and outstanding share capital of SBTech (Global) Limited ("SBTech"). Upon consummation of the preceding transactions, Old DK and SBTech became wholly owned subsidiaries of the Company.
DraftKings Inc. reported that its annual Total Revenue rose from $323.41 million in 2019 to $641.53 million in 2020, and that its Net Loss increased from $142.73 million in 2019 to $844.27 million in 2020.
On June 15, 2021, Hindenburg Research issued a report concerning DraftKings Inc. (NASDAQ: DKNG) entitled "DraftKings: A $21 Billion SPAC Betting It Can Hide Its Black Market Operations." Hindenburg Research detailed a series of disturbing red flags about DraftKings. Specifically, the report stated, "Unbeknownst to investors, DraftKings' merger with SBTech also brings exposure to extensive dealings in black-market gaming, money laundering and organized crime. Based on conversations with multiple former employees, a review of SEC & international filings, and inspection of back-end infrastructure at illicit international gaming websites, we show that SBTech has a long and ongoing record of operating in black markets."
Shares of DraftKings Inc. (NASDAQ: DKNG) declined from $72.16 per share on March 3, 2020, to as low as $44.65 per share on June 15, 2021.
The plaintiff claims that between December 23, 2019 and June 15, 2021, the Defendants made false and/or misleading statements and/or failed to disclose that SBTech had a history of unlawful operations, that accordingly, DraftKings' merger with SBTech exposed the Company to dealings in black-market gaming, that the foregoing increased the Company's regulatory and criminal risks with respect to these transactions, that as a result of all the foregoing, the Company's revenues were, in part, derived from unlawful conduct and thus unsustainable, that accordingly, the benefits of the Business Combination were overstated, and that as a result, the Company's public statements were materially false and misleading at all relevant times. Those who purchased shares of DraftKings Inc. (NASDAQ: DKNG) have certain options and should contact the Shareholders Foundation.
NASDAQ:DKNG Investor Notice: Lawsuit Alleges Misleading Statements by DraftKings Inc.
A lawsuit was filed on behalf of investors in DraftKings Inc. (NASDAQ:DKNG) shares over alleged securities laws violations.