Profit Pregame

Your Odds Just Got a Lot Better with this Sports Gambling Company

Bad Press is Providing You with a Great Buying Opportunity

One of the biggest names in sports gambling just took a hit. Here’s why you may want to jump in now.

What’s happening?

The last few years have seen some major shifts in both public opinion and legislation regarding gambling.

That is especially true for sports gambling, which has earned a much wider acceptance. Since 2018, 25 states have votes to legalize sports gambling.

The increase in the number of places where sports bets can be made has led to a ton of money flowing into the industry. In fact, sports gambling in the U.S. generated $1 billion in 2020.

And that number is being estimated to grow to as much $6 billion by 2023.

But despite the meteoric rise of the sports gambling industry, there are still doubters out there.

One detractor in particular took a swipe at one of the leading companies in the space this week, causing a selloff.

As a result, this could be one of the best opportunities to add sports gambling’s huge potential to your portfolio.

Where’s the money?

What started as a niche fantasy sports platform has evolved into one of the fastest-growing sports gambling companies in the country.

DraftKings Inc. (DKNG) has been making big moves to capitalize on the growing popularity of sports gambling. In January, DraftKings announced that it was expanding into Virginia – making it the 12th state in which customers could wager using its platform.

DraftKings is also now the official sports betting partner of the NFL, as of April.

But that didn’t stop Hindenburg Research from publishing a bearish report on DKNG stock this week. In the report, Hindenburg accuses SBTech – one of the companies with which DraftKings made a 3-way merger in order to go public – of extensive involvement in black markets, money laundering, and organized crime. It also states that SBTech has operated illegally in countries like China and Iran for years.

Furthermore, Hindenburg claims its research shows continued efforts by DraftKings to obscure its illegal dealings, all while insiders cash out of DKNG stock.

Shares of DKNG fell as much as 11.7% after the report was released on Tuesday.

And while some may read the Hindenburg report and decide to stay far away from DKNG, I see this as a great buying opportunity.

Here’s why…

How do I get some?

From a technical standpoint, it’s clear that DraftKings is a stock on the rise.

The company has reduced its losses per share each of the prior two years, and is coming close to profitability after a massive expansion campaign.

In its latest earnings report, DKNG showed a 252% jump in revenue as its number of paying customers rose 114%. DraftKings also increased its full-year revenue outlook to $1.15 billion.

And then there’s the issue of Hindenburg Research’s motivation for their report.

Hindenburg disclosed in its report that it had taken a short position on DKNG, supposedly in reaction to the information its research had uncovered.

But they have a long history of creating their reports on companies they short, then running a stock lower. The thing is, we really never know when the short was put on and then we don’t know when they cover.

It’s entirely possible that Hindenburg dropped this report in an effort to help its short position on DKNG and make a tidy profit.

In the end, I do not think this report from Hindenburg is a big deal. I like DKNG as a buy on this pullback as more and more states and countries open their laws to allow further expansion.

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In the Spotlight: The logjam that could harm your wallet

The COVID-19 pandemic created a myriad of issues for world economies.

And one major issue is persisting into the summer months that could have a huge impact on consumers.

Earlier this year, the accidental blockade on the Suez Canal by the ship Ever Given attracted a lot of attention for the disruption to global shipping that it caused.

But perhaps the bigger issue that has flown under-the-radar has to do with what the Ever Given and countless cargo ships like it carry.

For months now, there has been a global shortage in shipping containers, resulting in all-time high prices for the containers.

A series of recent disruptions have created excess demand for shipping containers that is likely to have two effects – lower supply of goods, and rising prices for those goods.

This story is still developing, but I’ll be watching for stocks that you should avoid, as well as any winners that emerge from this predicament. As more details come in, I’ll keep you posted on the best investment opportunities. Stay tuned.

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