- DraftKings on Tuesday announced the acquisition of Railbird, an exchange for trading event-based contracts.
- The company stated that this move supports its broader strategy to enter prediction markets, thereby expanding its addressable opportunity through regulated event contracts.
- Jefferies said that with the purchase of Railbird and the creation of DraftKings Predictions, the company is taking a wholly owned approach to prediction markets.
DraftKings (DKNG) became the top-most trending ticker on Stocktwits on Wednesday after the company’s shares jumped 5% in premarket trading, with Jefferies noting that with the purchase of Railbird and the creation of DraftKings Predictions, the company is taking a wholly owned approach to prediction markets.
The retail user message count on DraftKings increased 231% in the last 24 hours on Stocktwits. Retail sentiment on the stock improved to ‘bullish’ from ‘bearish’ territory compared to a day ago, with message volumes at ‘high’ levels, according to data from Stocktwits.
DraftKings highlighted that the acquisition supports its broader strategy to enter prediction markets, expanding its addressable opportunity through regulated event contracts.
Analyst Take On The Deal
Jefferies maintained its ‘Buy’ rating on DraftKings and kept a $51 price target on the stock, according to TheFly. The wholly owned approach by DraftKings through the purchase of Railbird is in comparison with Flutter Entertainment’s (FLUT) joint venture with CME Group (CME).
The firm believes that an offering in predictions is necessary for entry into OSB-illegal states, given the limited upfront capital spend due to the limited economics, which should be a positive for the stock.
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