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Tag: DraftKings Inc

  • BlackRock-backed fintech Trustly says IPO still at least one year out even as profits jump 51%

    BlackRock-backed fintech Trustly says IPO still at least one year out even as profits jump 51%

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    Trustly CEO Johan Tjarnberg.

    Trustly

    The boss of Swedish financial technology startup Trustly says an initial public offering for the company is still a year or two away from happening, even after a 51% jump in operating profit.

    In an exclusive interview with CNBC, Johan Tjarnberg, CEO of Trustly, said that his firm still needs time to prove the value of its open banking technology to investors before going public.

    “We need another year or two to really demonstrate to the market that open banking is happening happening, it’s here,” Tjarnberg told CNBC.

    “For me, there is so much we want to demonstrate to the market in terms of user adoption, merchant adoption. We still need some time to execute on our existing playbook.”

    Trustly is holding out on an IPO even after reporting a strong set of financials. Results shared exclusively with CNBC show the firm reported revenues of $265 million in its 2023 full year.

    Growth accelerated significantly in the second half of the year, Trustly said, climbing 27% compared with the same period in 2022. That was as transaction volumes spiked 48% over the same period.

    Tjarnberg told CNBC that the company’s performance in 2023 was heavily driven by the growth at its U.S. business. Trustly merged with American rival PayWithMyBank in 2020.

    “We invested a lot into the U.S. market,” Tjarnberg said. “We were roughly 20 people there four years ago; we now have 500 supporting the U.S. market.”

    Tjarnberg said that, in the first quarter of this year, Trustly saw heightened growth in areas like utilities, retail, and travel, with 22% of volumes coming from those core verticals, up 44% over 12 months.

    Chipping away at Visa, Mastercard?

    Trustly increased operating profit by 51% in full-year 2023, with adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) climbing to $51 million from $33 million in 2022.

    That was as overall transaction value processed during 2023 climbed by 79%, to $58 billion.

    Trustly helps companies integrate the ability to accept payments via open banking technology.

    This tech lets consumers make payments directly to a merchant’s bank account without the need for an intermediary such as a card issuer.

    It provides an alternative to incumbent credit card programs such as Mastercard and Visa, which charge merchants high fees for transactions.

    Gap between closed-source and open-source AI companies smaller than we thought: Hugging Face

    In the U.S., Tjarnberg said, Trustly is seeing heightened demand from merchants “trying to take down costs,” as high card processing fees have made them more price-conscious.

    “There is no secret that our objectives and ambition is to bring a good alternative to other payment methods, including cards,” he told CNBC.

    Open banking is a trend which has gained significant momentum, particularly across Europe.

    That’s thanks to the introduction of regulations which require banks to open their clients’ account data and payment functionalities to third-party firms.

    It has paved the way for new entrants into finance including fintechs, startups and tech companies. Founded in 2008, Sweden’s Trustly competes with the likes of GoCardless, TrueLayer, Volt, Bud, and Yapily.

    Future product plans

    Trustly expects to launch a feature that allows its merchants to set up recurring payments for customers. That will be targeted at things like telecom packages and subscription-based music streaming services.

    Tjarnberg said Trustly is “bullish” on the mobile space, particularly in the U.S. after having seen early success in mobile billing partnerships with the likes of AT&T and T-Mobile.

    Trustly is used by more than 9,000 merchants worldwide including Facebook, Alibaba, PayPal, eBay, AT&T, Unicef, Dell, Lyft, DraftKings, Wise, and eToro.

    Trustly is majority-owned by venture capital firm Nordic Capital, which owns a 51.1% stake in the business. Alfven & Didrikson is its second-biggest backer, with a 11.1% stake, while BlackRock holds an 8.9% stake.

    Aberdeen Standard Investments and Neuberger Berman own 0.7% and 0.9% stakes in Trustly, respectively, while others including the Trustly management and employees own 27.4%.

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  • Wednesday’s analyst calls: DraftKings bull case, credit card play for the long haul

    Wednesday’s analyst calls: DraftKings bull case, credit card play for the long haul

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  • Goldman calls this options trading strategy ‘systematically profitable’

    Goldman calls this options trading strategy ‘systematically profitable’

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  • ARK CEO Cathie Wood says she swerved the Arm IPO frenzy. Here’s why

    ARK CEO Cathie Wood says she swerved the Arm IPO frenzy. Here’s why

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    Cathie Wood, CEO of Ark Invest, speaks during an interview on CNBC on the floor of the New York Stock Exchange (NYSE) in New York City, February 27, 2023.

    Brendan McDermid | Reuters

    ARK Invest CEO Cathie Wood said she did not participate in Arm‘s blockbuster initial public offering last week because she finds the British chip designer was overvalued relative to its competitive position.

    Arm, the Cambridge-based company controlled by Japanese investment giant SoftBank, listed on New York’s Nasdaq on Thursday at an IPO price of $51 a share for a valuation of almost $60 billion. Shares jumped almost 25% on the first day of trading to close at $63.59.

    The initial buzz has since fizzled, with the stock suffering successive daily declines to end the Tuesday trade session at $55.17.

    Speaking on CNBC’s “Squawk Box Europe” on Wednesday, Wood said the recent frenzy around AI-exposed companies was justified and that “innovation is undervalued given the enormous opportunities that we see ahead, catalyzed very importantly by artificial intelligence.”

    “As far as Arm, I think there might be a little bit too much emphasis on AI when it comes to Arm and maybe not enough focus on the competitive dynamics out there,” she added.

    Arm CEO Rene Haas and executives cheer, as Softbank’s Arm, chip design firm, holds an initial public offering (IPO) at Nasdaq Market site in New York, U.S., September 14, 2023.

    Brendan Mcdermid | Reuters

    “So we did not participate in that IPO, and we also compare it to the stocks in our portfolios. Arm came out, we think, from a valuation point of view on the high side, and we see within our portfolios much lower priced names with much more exposure to AI.”

    Arm declined to comment.

    The top holdings in Wood’s flagship ARK Innovation ETF include Tesla, Shopify, UiPath, Unity, Zoom, Twilio, Coinbase, Roku, Block and DraftKings.

    After taking a beating during the recent cycle of aggressive interest rate hikes from the U.S. Federal Reserve, the ARK ETF resurged this year, as investors flocked to stocks with AI exposure. Wood said that the anticipation of interest rates peaking would further this trend.

    “The appetite for innovation is stirring here, and I think one of the reasons is because many investors and analysts are starting to look over the interest rate hike moves we’ve seen, record breaking in the last year or so, and to the other side,” she explained.

    With inflation coming down across major economies and with central banks expected to begin unwinding their aggressive monetary policy tightening over the next year, Wood suggested the coming period “should be a very good environment for innovation and global megatrend strategies.”

    ARK Invest on Wednesday acquired British thematic ETF issuer Rize ETF for £5.25 million ($6.5 million), marking the company’s first venture into the European passive investment market.

    Wood said that Europe has not had access to actually invest in the company’s U.S.-based ETFs until now, despite accounting for around 25% of demand for the company’s research since ARK’s inception in 2014.

    “The cost of technology, especially with artificial intelligence now, is collapsing, and therefore it’s going to be much easier to build and scale tech companies anywhere in the world. This is no longer just the purview of Silicon Valley,” Wood said. “We are very open-minded about technologies flourishing throughout the world, including Europe.”

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  • Fanatics increases its offer to $225 million to acquire PointsBet’s U.S. assets

    Fanatics increases its offer to $225 million to acquire PointsBet’s U.S. assets

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    Fanatics founder and CEO Michael Rubin at his office in New York.

    The Washington Post | Getty Images

    Fanatics has raised the stakes as it looks to acquire PointsBet’s U.S. business.

    The sports platform company increased its offering by 50% to $225 million in an effort to outbid DraftKings, which made a non-binding offer of $195 million earlier this month.

    PointsBet shareholders will formally vote on the new offer Thursday night.

    “The Board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty,” PointsBet Chairman Brett Paton said in a statement.

    PointsBet gave DraftKings until 6 p.m. on Tuesday (Melbourne time) to make a binding offer and they failed to do so.

    DraftKings CEO Jason Robins previously told CNBC that while the deal wouldn’t have been transformative for DraftKings, it would allow the company to grow market share.

    If the deal is formally approved by PointsBet shareholders and regulators, it will give Fanatics much needed U.S. real estate in the 15 U.S. states where they operate. PointsBet is the seventh-largest U.S. sports betting operator.

    “Our U.S. team will have a strong future as part of the Fanatics Betting and Gaming group and PointsBet will build on the opportunities in Australia and Canada underpinned by a strong balance sheet,” Paton said.

    Fanatics CEO Michael Rubin told CNBC after the DraftKings announcement that he was highly skeptical of their proposed offer, which he viewed as DraftKings attempting to slow Fanatics down.

    “It’s a move to delay our ability to enter the market,” Rubin said. “I guess they are more concerned about us than I would have thought.”

    DraftKings and Fanatics both declined to comment on the news.

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  • Fanatics to buy PointsBet’s U.S. assets for about $150 million

    Fanatics to buy PointsBet’s U.S. assets for about $150 million

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    Fanatics logo is seen on the dugout wall before the game between the Pittsburgh Pirates and the Milwaukee Brewers at PNC Park on July 3, 2022 in Pittsburgh, Pennsylvania. (Photo by Justin Berl/Getty Images)

    Justin Berl | Getty Images

    Fanatics has agreed to acquire the U.S. operations of PointsBet, marking the sports giant’s first major leap into U.S. sports betting.

    The deal is worth about $150 million in cash. The companies announced the deal Sunday night soon after CNBC reported an agreement was reached.

    “Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business,” the companies said in a joint statement. “While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”

    Fanatics will gain access to at least 15 states with the deal, according to people familiar with the deal who declined to be named because discussions were private. Fanatics expects to have access to the majority of states where PointsBet operates by the start of the NFL season, according to one of the people.

    PointsBet, whose shares are traded in Australia, is expected to hold a shareholder vote on the deal in late June. Only PointsBet’s U.S. assets are part of the deal. Fanatics will plan to fund some of the remaining cash flow burn from PointsBet, which has had to spend heavily on marketing to compete with larger rivals DraftKings and FanDuel.

    PointsBet forecast a loss of between $77 million and $82 million for the second half of the year. Citing “very challenging” market conditions, the company said Sunday that it would need to raise additional capital at a “significant discount to recent market prices” in the near term if the deal with Fanatics somehow fell apart.

    NBCUniversal will get proceeds from its previous deal with PointsBet and will no longer have an equity stake, according to PointsBet. NBC acquired a 4.9% equity stake in PointsBet in 2020.

    Fanatics has been in talks with a number of different sports betting companies over the past year as it has plotted its path forward in mobile gambling.

    “This is a 10-year journey,” Matt King, the CEO of Fanatics Betting, said at the SBC Conference earlier this month. “We’re going to move very methodically through that 10-year journey. And by doing that and taking that approach, it allows you to be a bit more considered in your decisions. You can kind of move slower, slightly slower today, in order to move fast later.”

    Fanatics is a sports platform company with a private valuation of $31 billion. The company has forecast 2023 revenue of $8 billion.

    Fanatics owns commerce assets, a sports trading card business, and is building out a sports betting division. The company acquired legendary trading card company Topps for $500 million last year.

    Disclosure: NBCUniversal is the parent company of NBC Sports and CNBC.

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  • Investor Dan Niles likes these tech stocks heading into the second quarter

    Investor Dan Niles likes these tech stocks heading into the second quarter

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  • Philadelphia Eagles emerge as early Super Bowl favorites over Kansas City Chiefs

    Philadelphia Eagles emerge as early Super Bowl favorites over Kansas City Chiefs

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    The Kansas City Chiefs were still celebrating on the field Sunday night when oddsmakers moved them from slight favorites to win the Super Bowl over the Philadelphia Eagles to slight underdogs.

    After the Chiefs opened as a 1.5-point favorite by BetMGM
    MGM,
    +0.24%    ,
    the betting line quickly shifted, favoring the Eagles by 2.5 points, with the over/under at 49.5 points. FanDuel sports book odds also swung from the Chiefs to the Eagles, by 2 points, and DraftKings
    DKNG,
    +5.17%
    favored the Eagles by 2.5 points.

    The betting line will likely continue to change slightly over the next two weeks.

    Super Bowl LVII (that’s 57 to you non-Romans) will kick off at 6:30 p.m. Eastern on Sunday, Feb. 12, in Glendale, Ariz.

    The Chiefs edged the Cincinnati Bengals, 23-20, on Sunday night in the AFC Championship game in Kansas City, winning on a last-second field goal. Kansas City will be playing in its third Super Bowl in the past four years; the Chiefs last won it in 2020 over the San Francisco 49ers.

    Earlier in the day, the Eagles earned their spot by demolishing the 49ers, 31-7, in an NFC Championship game in Philadelphia that was never close and saw both 49ers quarterbacks — starter Brock Purdy and backup Josh Johnson — leave the game with injuries (Purdy returned in the second half, but essentially could not throw the ball). The Eagles were last in the Super Bowl five years ago, when they beat the New England Patriots.

    Last year, PlayUSA estimated there were more than $1 billion in legal wagers on the Super Bowl — a record amount — while AmericanGaming estimated a total of $7.61 billion was wagered in the U.S., when including casual bets, bookies and pool contests.

    Sports betting is legal in some form in 32 states, as well as the District of Columbia, according to the American Gaming Association.

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  • Here are Wednesday’s biggest analyst calls: Apple, IBM, Amazon, Tesla, Exxon, Gap, Netflix & more

    Here are Wednesday’s biggest analyst calls: Apple, IBM, Amazon, Tesla, Exxon, Gap, Netflix & more

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  • Dow down by more than 500 points as Fed officials point to more rate hikes, China protests rattle markets

    Dow down by more than 500 points as Fed officials point to more rate hikes, China protests rattle markets

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    U.S. stocks tumbled on Monday as protests in China raised the risks to global growth and Federal Reserve policy makers said more interest-rate increases are needed to control inflation.

    How stocks are trading
    • The Dow Jones Industrial Average was down 523 points, or 1.5%, at 33,824, near its session low.

    • The S&P 500
      SPX,
      -1.65%
      retreated 68 points, or 1.7%, to 3,958.

    • The Nasdaq Composite shed 195 points, or 1.7%, dropping to 11,031.

    U.S. stocks had notched weekly gains last week for the second time in three weeks. The Dow rose 1.8%, the S&P 500 advanced 1.5% and the Nasdaq gained 0.7%.

    What’s driving markets

    Wall Street started the week in a downbeat mood as traders absorbed the impact of unrest in China and assessed interest-rate commentary by a pair of Fed officials on Monday.

    St. Louis Fed President James Bullard told MarketWatch that he favors more aggressive interest-rate hikes to contain inflation, and that the central bank will likely need to keep interest rates above 5% into 2024. Meanwhile, his colleague John Williams, president of the New York Fed, said that U.S. unemployment could climb to as high as 5% next year, versus October’s rate of 3.7%, in response to the central bank’s series of rate hikes.

    Overseas, Hong Kong’s Hang Seng Index
    HSI,
    -1.57%
    closed down by 1.6% and most equity indexes across Asia also fell, with the exception of India’s, on concerns about unrest in China. Those concerns also spilled over into commodity markets, where West Texas Intermediate crude for January delivery
    CLF23,
    +0.93%
     briefly fell to less than $74 per barrel before recovering and settling at $77.24 a barrel on the New York Mercantile Exchange. Meanwhile, copper prices HG00 were off 0.9% at $3.594 per pound.

    “What people are worried about is the potential for protests in China to spread and whether the population is reaching its breaking point,” said Derek Tang, an economist at Monetary Policy Analytics in Washington. “At the same time, Fed speak is ramping up and the message is there’s more hikes to come. So investors aren’t finding relief.”

    Signs that economic activity in China will continue to be disrupted by the protests or by additional anti-COVID measures will likely continue to weigh on commodity prices, analysts said. Meanwhile, concerns about global growth helped to support government bond markets earlier on Monday, when the yield on the 10-year note
    TMUBMUSD10Y,
    3.693%
    briefly traded at its lowest level since October.

    The unprecedented waves of protest in China “have caused ripples of unease across financial markets, as worries mount about repercussions for the world’s second-largest economy,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. “As demonstrations spread across the country from Beijing to Xinjiang and Shanghai, reflecting rising anger about the zero-Covid policy, a sustained recovery in demand across the vast country appears even further away.”

    But the news wasn’t all bad: Reports of strong online Black Friday sales helped boost shares of Amazon.com Inc.
    AMZN,
    +0.29%    ,
    which were up 0.6%.

    Investors can expect more information about the health of the U.S. economy in what’s shaping up to be a busy week for U.S. economic data: Later this week, investors will receive the ADP employment report followed by the November jobs report. Revised data on third-quarter gross domestic product is due on Wednesday, along with the Fed’s Beige Book report. Federal Reserve chair Jerome Powell is set to speak publicly on Wednesday, and a closely watched gauge of inflation is due on Thursday.

    Read: ‘We see major stock markets plunging 25% from levels somewhat above today’s,’ Deutsche Bank says

    Single-stock movers

    — Jamie Chisholm contributed to this article.

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  • Fox loses legal battle to buy a stake in FanDuel from parent company Flutter at a lower valuation

    Fox loses legal battle to buy a stake in FanDuel from parent company Flutter at a lower valuation

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    The FanDuel Inc. app.

    Andrew Harrer | Bloomberg | Getty Images

    Fox lost a legal battle to buy an 18.6% stake in sports betting company FanDuel Group from its parent company Flutter at a reduced valuation, according to a ruling Friday from a New York arbitrator.

    Should Fox exercise its option to take the stake, it would be at a price of at least $3.72 billion.

    The decision ends the more-than-yearlong lawsuit between the two companies over the valuation of FanDuel, which has emerged as one of the leading U.S. sports betting platforms alongside services from DraftKings, Caesars and MGM.

    The price that Fox would have to pay is based on a FanDuel valuation of $20 billion, according to the ruling. Flutter, which owns nearly 95% of FanDuel, acquired a 37.2% stake in the company in December 2021 at an implied valuation of $11.2 billion. Fox had argued the price should be based on that threshold.

    Still, Fox could have been ordered to pay much more, as Flutter had been arguing for Fox to pay “fair market value” to exercise the option, which could have valued the stake at upward of $6 billion based on a March 2021 estimated value, a Fox spokesperson told CNBC.

    Fox has a 10-year option to acquire the stake, which runs through December 2030. The arbitrator ruled that there would be a 5% annual escalator on its purchase price, meaning the current price of a deal would be $4.1 billion.

    “Today’s ruling vindicates the confidence we had in our position on this matter and provides certainty on what it would cost Fox to buy into this business, should they wish to do so,” said Flutter CEO Peter Jackson in a statement.

    As part of the arbitration ruling, Flutter cannot pursue an IPO for FanDuel without Fox’s consent or approval from the arbitrator. Flutter had previously considered taking FanDuel public, taking advantage of the booming sports betting market.

    “Fox is pleased with the fair and favorable outcome of the Flutter arbitration,” the company said in a statement following the ruling. “Fox has no obligation to commit capital towards this opportunity unless and until it exercises the option. This optionality over a meaningful equity stake in the market leading U.S. online sports betting operation confirms the tremendous value Fox has created as a first mover media partner in the U.S. sports betting landscape.”

    Sports betting has continued to grow in the U.S. as more states bring legal sports betting online — as of Nov. 1, 33 states allow some form of sports betting, with California having two measures on its ballot to legalize it.

    That has pushed up revenues as well. Commercial sports betting revenue nationally through August was $3.97 billion, up nearly 70% year over year, according to data from the American Gaming Association.

    But that continued growth hasn’t benefitted all public sports betting companies. DraftKings stock posted its worst-ever decline on Friday after the company reported monthly customer growth that fell short of estimates even as it revised its revenue forecast upwards. DraftKings, which is down more than 59% year-to-date, is now valued at just over $5 billion.

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