Balling Investor: Michael Jordan Buys Equity in DraftKings, Joins as Special Advisor
Legendary basketball hall of fame player and billionaire Michael Jordan has this month invested an undisclosed amount into the US’ market-leading fantasy sports and sports betting firm, DraftKings.
The six-time NBA Championship winner and owner of the Charlotte Hornets will also become a partner and special advisor to the DraftKings’ board of directors. Jordan will “provide guidance and strategic advice” to the company, according to an official statement.
The Boston-based sports betting operator’s stocks soared up to 10% on some days in the first week of September following the news. Shares currently sit at 8% above their price at this time last month.
“The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team,” finished the statement from DraftKings’ CEO Jason Robins.
Michael Jordan’s partnership with his first sports betting firm is a long-awaited move. The world’s most famous basketball player has a well-documented interest in gambling. It has led to some controversy with his team, as recently documented by Netflix, but it has never been confirmed to have caused him problems or threatened his vast fortune.
Jordan is well-known for his investments and endorsements, including his hugely popular Air Jordan line in collaboration with Nike. His name—and, no doubt, business and investment experience—can add a lot to DraftKings’ already soaring reach.
Jordan made his name with the Chicago Bulls NBA team, so it’s only right that he’s chosen a sports betting company with a suitably bullish outlook to partner with.
DraftKings has seen huge success since it launched in 2008 when it became the first legal online sports betting operator in New Jersey. Today, it has over 10 million regular customers across various legal US states.
In 2016, DraftKings tried to merge with rival fantasy sports operator FanDuel. However, the move was blocked by the feds, as it would have seen the merged company control over 90% of the US fantasy sports market.
That decision hasn’t seemed to cost DraftKings much, though. Its stocks are up to 240% on this time last year, having gone public with shares in early 2020. That’s despite posting a Q1 loss of nearly $70 million, nearly all due to the COVID-19 pandemic shutting down professional sports for several months.
Investors don’t seem to mind either. Just this week, respected investment analyst Evercore gave DraftKings an “outperforming” indicator for the next six months. Speculators have pointed to the increased uptake of legal online sports betting and casino gaming in various US states and the possibility that legal markets will spread to more states in the coming years.
According to some estimates, the percentage of Americans betting on sports online could rise from 10% to 30 or 40% in the next decade—a 300%+ rise.
Despite many expert economists giving dire outlooks for the global economy under the specter of the coronavirus pandemic, 2020 has been a big year for investments and deals.
Some of the world’s biggest gambling companies have been buying each other up and merging, including Flutter Entertainment and The Stars Group and Evolution Gaming and NetEnt.
In a similar way, Michael Jordan’s massive media profile will hopefully only add to DraftKings’ ascendancy and ensure that this industry can remain competitive during tight economic times.
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