Quick Overview

DKNG shares declined approximately 10% Wednesday, settling near $22.52 on unusually light volume — 82% below typical trading activity
Senate legislation related to sports betting spooked the market, interpreted as unfavorable for the company’s business model
NCAA initiated legal action against DraftKings to prevent unauthorized use of “March Madness” and related tournament branding
The company recently disappointed investors by lowering its 2026 revenue forecast to $6.5–6.9B, falling more than $600M short of analyst expectations
Despite recent turbulence, Wall Street maintains a “Moderate Buy” rating with a consensus target price of $37.09

Shares of DraftKings (DKNG) were changing hands around $22.52 Wednesday afternoon, marking a decline of approximately 10% for the session.

DraftKings Inc., DKNG

The sharp selloff stems from a double dose of negative catalysts converging on the same day. Market participants reacted negatively to developments surrounding a Senate betting bill, while simultaneously, the NCAA launched legal proceedings aimed at preventing the sports betting giant from utilizing tournament trademarks including “March Madness.”

The NCAA’s legal action carries particularly problematic timing. Filing the lawsuit during the heart of tournament season — historically one of the most profitable windows for sports wagering platforms — threatens to hamper promotional campaigns and potentially impact near-term earnings. Any court-imposed restrictions on marketing language could diminish competitive positioning during this critical revenue period.

Trading volume Wednesday barely exceeded 2.8 million shares, representing an 82% decline from the typical session average of 15.6 million. Such dramatically reduced liquidity can exaggerate price swings, magnifying both upward and downward movements.

This latest setback continues a challenging 2026 for DKNG. Company leadership previously issued full-year revenue projections of $6.5–6.9 billion, substantially missing consensus estimates by over $600 million. That announcement triggered a mid-teens percentage decline, initiating sustained downward pressure on the shares.

Revenue Outlook Disappoints Following Exceptional 2025 Performance

The guidance reduction proved particularly disappointing considering the company’s impressive Q4 2025 results. Quarterly revenue reached approximately $1.99 billion, representing 43% year-over-year expansion. Full-year adjusted EBITDA surged to roughly $620 million, more than tripling from the prior period, while the company achieved profitability on a net income basis for the first time in its history.

DraftKings finally delivered the financial milestones the market had anticipated — only to immediately temper future expectations. This sequence created whiplash among shareholders and fundamentally altered the growth trajectory narrative entering 2026.

Shares currently trade significantly beneath both the 50-day moving average of $26.39 and the 200-day moving average of $32.01, illustrating the sustained downward momentum following the guidance announcement.

From a competitive strategy perspective, DraftKings has pursued an aggressive pricing approach. Analysis conducted during the March Madness period revealed DKNG offering the tightest average vigorish among leading operators on both money-line wagers and total bets. While this strategy enhances customer acquisition and retention, it simultaneously compresses profit margins.

Street Sentiment Remains Constructive Despite Price Target Reductions

Analyst community sentiment toward the stock remains generally positive. Current ratings include 25 Buy recommendations, five Hold ratings, and two Sell calls. The consensus 12-month price objective stands at $37.09 — representing potential upside exceeding 60% from Wednesday’s trading levels.

Mizuho Securities lowered its price target from $46 to $44 while maintaining an “outperform” designation. Stifel reduced its objective from $44 to $40, preserving a “buy” rating. Jefferies continues with a $46 target. Wells Fargo reiterated its “overweight” stance.

Regarding insider activity, Director Harry Sloan acquired 100,000 shares during February at $21.85 per share — representing a $2.185 million capital deployment signaling confidence that shares were undervalued at those levels. That purchase price closely aligns with current market quotations.

Insider selling totaled approximately 549,495 shares over the trailing 90-day period, though company insiders collectively retain 47.08% ownership. Institutional investors control 37.7% of outstanding shares.

The stock trades near its 52-week low range, with market capitalization hovering around $10.63 billion and beta measured at 1.67.

The post DraftKings (DKNG) Stock Plunges 10% Amid Senate Bill and NCAA Legal Battle appeared first on Blockonomi.

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Filed under: Bitcoin - @ March 25, 2026 7:23 pm