Why did DraftKings Inc. (DKNG) Trading Volume drop so dramatically?
Shares of DraftKings Inc. (DKNG), a bookmaker in the United States, fell 11.7% to $44.65, with the decline slowing to $48.51. This is reflected in data from trading on the NASDAQ. An investment firm specializing in forensic financial research, Hindenburg Research, published a report that affected the stock. A Hindenburg Research report alleges that DraftKings continuously circumvented the law and covered up black market operations, as well as insiders aggressively tipped off stockholders. In addition, Hindenburg announced that it was shorting the bookmaker. The company went public in 2020 following a three-way merger with SPAC, sponsored by Diamond Acquisition, and the Bulgarian gaming technology company SBTech. In a report by Hindenburg Research, Diamond Acquisition acquired 9.3 million shares for approximately $114 million in exchange for investment. Insiders have sold a total of $1.4 billion since the listing  the only participant is Shalom Mekenzi, founder of SBTech, who sold DraftKings stocks for $568 million. According to Hindenburg Research, the bookmaker is also linked to the black market through SBTech. As a result, former employees and reports indicate that approximately half of SBTechs revenue came from unregulated or black markets in 2020. Benjamin Chaiken, an investment bank analyst at Credit Suisse, has criticized todays sell-off in DraftKings Inc. (DKNG) as excessive. In the experts view, the stock would be little affected if SBTechs earnings were to vanish entirely. Using todays sale, Chaiken intends to invest in potential wager legalization in Canada and New York, which are seen as the most valuable catalysts for the projects success. Hindenburg Research has released several revealing reports in the past. Last September, the company released a statement accusing Nikola of falsehoods, fraud, and understatement of its capabilities. After that, shares of the startup plunged 12.5%. The Hindenburg Group released a report about Lordstown, a startup company that makes electric cars. Investors were misled by the companys false preorder data and misleading statements about demand. On Tuesday, DraftKings Inc. (NASDAQ: DKNG) shares closed at $48.51, declining by -4.17%. The stock volume remained at 88.03 million shares, which was higher than the average daily volume of 17.62 million shares over the past 50 days. Over the last twelve months, DKNG shares rose by 16.08 percent, and they declined by -12.28 percent last week. It has lost -27.75 percent over the past three months, while it has lost -3.15% over the past six months. Additionally, the company has a current market of $19.64 billion, and the number of its outstanding shares is 397.62 million.