DraftKings vs. Penn National Gaming: Which Stock is a Better Buy?

Draftkings, Inc. (DKNG) and Penn National Gaming, Inc. (PENN) are two major companies revolutionizing the sports betting industry. With the return of pro and college football in addition to the NBA and MLB, DKNG and PENN are capitalizing on the opportunity…

DKNG gained 23.4% in the past month, outperforming PENN’s 14.8% returns over this period.  However, in terms of three-month performance, PENN is the clear winner with 137.1% returns versus DKNG’s 73.5%.

But which stock is the better buy now? Let’s find out.

Latest Movements

DKNG’s unconventional IPO garnered attention from investors from all spheres. It was acquired by Diamond Eagle Acquisition Corporation (DEACU) and SBTech under a Special Purpose Acquisition Company (SPAC) agreement. This allowed the company to bypass the costs and lengthy time frame demanded by a traditional IPO process, leading to a more efficient stock market debut on April 23rd.

The three-way merger with DEACU and SBTech has provided DKNG with the adequate capital flow as well as technical expertise to become an industry leader in sports betting.

DKNG recently announced a public offering of 32 million stocks through a syndicated deal, to raise approximately $1.67 billion. The net proceeds are going toward funding its exclusive partnership deals with various sports organizers and general corporate expenses.

DKNG has entered into exclusive multi-year deals with the Philadelphia Eagles, New York Giants, and ESPN. It also partnered with Colorado Rockies to become the franchise’s Official Daily Fantasy Operator and Official Sports Betting Operator. DKNG also opened Draftkings SportsBook at Mardi Gras Casino in Colorado.

PENN recently launched the Barstool Sportbook app for online sports betting in multiple games, which quickly gained popularity among the masses and rose to the #1 app on the App store. Currently, only functioning in Pennsylvania, PENN is planning to expand the reach of the app across the country. It also partnered with Sportsradar to use real-time data of NFL games on its betting platforms.

PENN also raised $982.10 million through an underwritten public offering of 16.10 million shares, which was closed on September 25th.

Recent Financial Results

DKNG reported a 23.6% year-over-year increase in revenues to $70.93 million in the second quarter ended June 2020. The company ended the quarter with…

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