Chanos Remains Bearish on DraftKings, Calls It Favored Short

Kynikos Associates founding father Jim Chanos is noneffervescent bearish on DraftKings (NASDAQ:DKNG) despite the fact that the online sportsbook operator’s shares surged nearly 22 percent this week.

In an question today with CNBC, the famed little vendor reiterated his disconfirming on the gaming company, calling it I of his favorite shorts. Chanos revealed his firm’s bearish attitude in DraftKings on CNBC last-place December and the gillyflower is mastered almost 28 percent since then.

That sparked a public rift with DraftKings co-founder and CEO Jason Robins who criticized Chanos’s math skills on Twitter. In today’s CNBC interview, the Kynikos founder acknowledged he made a mathematical error inwards his pilot comments on DraftKings and that the gaming company’s effectual team sent him correspondence to that effect, but he’s stock-still forecasting downside for the stock.

This is the of import musical theme i want to capture across. For stocks that experience gone down, a lot of fundamental principle have really dropped at or worse than the stocks experience declined,” said Chanos.

In talking about “my friend Jason’s company” — import DraftKings — Chanos notes the consensus 2025 earnings before interest, taxes, depreciation and amortization (EBITDA) judge was $360 zillion when the Kynikos father appeared on CNBC in conclusion December. It’s at present $260 million.

Gloomy DraftKings View

In his initial assessment of the gaming company, Kynikos boss said the business concern mold is flawed and the manipulator is destined to continue losing money.

While some rivals, including BetMGM and Caesars Sportsbook, are eyeing breakeven or modest EBITDA profits in belatedly 2023, the aspect on DraftKings is to a greater extent mirky with some analysts expression it could be 2024 or 2025 before the Boston-based keep company ceases losing money.

“In effect, DraftKings today is selling at the same 2025 Earnings Before Interest Taxes Depreciation and Amortization multiple as it was inwards December,” said Chanos.

That implies the gaming companion remains overvalued. Chanos adds that since his CNBC appearance a few months ago, DraftKings’ 2022 Earnings Before Interest Taxes Depreciation and Amortization red ink idea has gone to $900 meg from $500 million.

“Things are getting worsened there, non better,” according to the unforesightful seller.

At the closely of US markets today, DraftKings stockpile resides 73.62 percent infra its 52-week high-pitched and 31.06 percent supra its 52-week low. On that basis, the shares need to to a greater extent than triple to payoff to the older heights of $74.38.

Wynn, Too

Chanos has a lengthy story of being bearish on Cathay and some of the country’s to the highest degree widely followed stocks and that aspect isn’t changing.

On a related note, he told CNBC today that Kynikos maintains a little place inward Wynn Resorts (NASDAQ:WYNN), which operates ii integrated resorts inwards the Chinese territory of Macau.

Chanos revealed that bearish position in conclusion Sep when Wynn was trading around $80, expression the shares should shack in the $40s. The stockpile shut at $79.65 today.

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