5 Reddit Stocks That Are Getting Crushed

4. DraftKings Inc. (NASDAQ:DKNG)

Number of Hedge Fund Holders: 34 

Decline in Share Price Over Past Six Months: 61.49%      

DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming firm. There have been concerns around revenue deceleration of the firm. To address some of these problems, the company recently announced the first in-house NFTs launch in the company’s marketplace. The NFTs, part of the Primetime NFT Series, will be the 2022 College Hoops Collection and have been slated to launch as the national college basketball tournament begins. Matt Kalish, the president of the firm, said the NFTs will drive engagement and bridge gaming offerings. 

On March 17, UBS analyst Robin Farley kept a Neutral rating on DraftKings Inc. (NASDAQ:DKNG) stock and lowered the price target to $18 from $44, underlining that there was a more “subdued” profitability outlook for the firm into 2024. 

At the end of the fourth quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $1.30 billion in DraftKings Inc. (NASDAQ:DKNG), up from 28 the preceding quarter worth $1.32 billion.

In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DraftKings Inc. (NASDAQ:DKNG) was one of them. Here is what the fund said:

“Shares of DraftKings Inc. (NASDAQ:DKNG) fell in the quarter, as stocks of online gaming companies were under pressure. Sports betting and i-gaming are rolling out with great fanfare and success across the country; however, investors seem concerned about competition and margins. Most participants are spending heavily on marketing and promotions, which is cutting into margins. We see this as worthy investment in customer acquisition at a moment in time when revenues are just building. We continue to believe that online sports betting and gaming will be enormous industries, that DraftKings Inc. (NASDAQ:DKNG) will be a leading player. We think the business will have high margins as it matures. We believe we are underwriting the business conservatively and see much upside in the long term.”