Shares of DraftKings Inc. DKNG, +3.11% ran up 7.3% in premarket trading Friday, after the sports betting company raised its full-year revenue outlook, but the company disclosed an investigation by the Securities and Exchange Commission concerning allegations over “black-market gaming” and money laundering made by short seller Hindenburg Research. DraftKings said in its 10-Q filing with the SEC that it received a subpoena on July 9 from the SEC seeking documents concerning certain of the allegations. The company said it is cooperating with the SEC’s inquiry, and said despite the “potential for significant damages,” it does not believe the outcome of the proceeding will have a material adverse effect on its financials. On June 15, Hindenburg said its research showed that SBTech, which was part of the three-way merger that took DraftKings public in April 2020, had an ongoing record of operating in black markets, and has sold to “plenty of mobs.” DraftKings stock hsa slipped 2.7% over the past three months, while the S&P 500 SPX, +0.04% has gained 5.4%.
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