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DraftKings rebounds after Wall Street hears its prediction market plans

The company plans to launch its own predictions product in the coming months.

DraftKings more than reversed its 11% drop in the wake of its post-close earnings report Thursday, after briefing analysts in its earnings call about its plan to get its own prediction markets business up and running “in the coming months.”

Sportsbooks like DraftKings — and FanDuel, which is owned by Flutter Entertainment — have been battered in recent months, as it has become clear that gamblers are now often turning to prediction markets like Kalshi to take positions on the outcomes of NFL games rather than making bets on traditional sportsbooks.

DraftKings responded by recently buying CFTC-licensed derivatives exchange Railbird as it moves quickly to get its own prediction markets business up and running.

Prediction markets are currently federally regulated as financial derivatives by the CFTC — though there is ongoing litigation in which state gambling regulators argue that prediction markets should be subject to state laws on sports gambling.

At any rate, DraftKings executives told Wall Street analysts in a post-earnings conference call early Friday that it views these markets as a significant opportunity to expand into states where sports gambling is currently illegal.

In his opening remarks on the conference call, DraftKings CEO Jason Robins had this to say on the topic:

“We are excited about our pending launch of DraftKings predictions and its potential to expand our total addressable market in the coming months. We expect DraftKings predictions to enter many new states with sport event contracts, unlocking a new customer base and revenue stream.

Nearly half the country’s population remains without access to legal online sports betting. But there are several other companies offering federally regulated predictions in all 50 states as growth in predictions continues. This may also motivate more states to legalize online sports betting and iGaming with reasonable regulation and taxation.”

DraftKings has other growth strategies in the works as well, such as a Spanish-language version of its betting app “that will meet the demands for a growing audience ahead of the World Cup in 2026.”

The market clearly likes what it heard more than it liked the look of the numbers yesterday: the company fell short of sales expectations and trimmed its full-year guidance. After falling roughly 11% after-hours, DraftKings regained all that ground and is up more than 3%.

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GameStop jumps in after-hours trading after CEO Ryan Cohen purchases another 500,000 shares

Ryan Cohen is putting his money where his mouth is.

The GameStop CEO bought another 500,000 shares of company stock for $10.8 million on Wednesday, per a filing.

The stock was trading higher on Wednesday thanks to Cohen’s purchase of 500,000 shares for roughly $10.6 million on Tuesday, and extended these gains in the after-hours session on this news.

“The Reporting Person believes that it is essential for the Chief Executive Officer of any public company to purchase shares of such company in the open market with his or her own personal funds in order to further strengthen alignment with stockholders,” per the filing. “The Reporting Person believes that any Chief Executive Officer who fails to do so should be fired.”

Cohen is poised to become even more financially enmeshed with GameStop’s stock and operating performance should shareholders approve a package that would tie his pay completely to ambitious targets for the company’s earnings and market cap.

The CEO now owns about 8.56% of shares outstanding.

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AppLovin tumbles; company dismisses negative report as “false, misleading, and nonsensical”

AppLovin managed to finish Tuesday well off its lows after initially getting clobbered in the wake of an incendiary report published by CapitalWatch.

Nonetheless, shares are getting torched on Wednesday, ending down nearly 6%. An AppLovin spokesperson forcefully denied the allegations made by CapitalWatch, which included calling the ad tech firm “the ultimate monument to 21st-century new-type transnational financial crime.”

Per an emailed statement:

We categorically reject the claims made in this report, which is rife with false, misleading, and nonsensical allegations. AppLovin’s public filings transparently disclose our material investments, global operations, and information regarding significant shareholders.

Claims that AppLovin facilitated money laundering or its products are used for unauthorized downloads are patently false. AppLovin functions within a broader ecosystem that includes major app stores, operating systems, and payment providers, and the apps monetized through our platform must be publicly available on the major app stores and subject to their independent review and enforcement. Economically, the money laundering theory is implausible: publishers receive only a portion of advertiser spend, meaning any attempt to launder funds would require forfeiting a substantial share while creating a highly visible, auditable transaction trail across multiple independent companies. Accepting the report’s premise would therefore imply a systemic failure across the broader mobile advertising and app-store ecosystem, for which the report provides no evidence.

Nonetheless, shares are getting torched on Wednesday, ending down nearly 6%. An AppLovin spokesperson forcefully denied the allegations made by CapitalWatch, which included calling the ad tech firm “the ultimate monument to 21st-century new-type transnational financial crime.”

Per an emailed statement:

We categorically reject the claims made in this report, which is rife with false, misleading, and nonsensical allegations. AppLovin’s public filings transparently disclose our material investments, global operations, and information regarding significant shareholders.

Claims that AppLovin facilitated money laundering or its products are used for unauthorized downloads are patently false. AppLovin functions within a broader ecosystem that includes major app stores, operating systems, and payment providers, and the apps monetized through our platform must be publicly available on the major app stores and subject to their independent review and enforcement. Economically, the money laundering theory is implausible: publishers receive only a portion of advertiser spend, meaning any attempt to launder funds would require forfeiting a substantial share while creating a highly visible, auditable transaction trail across multiple independent companies. Accepting the report’s premise would therefore imply a systemic failure across the broader mobile advertising and app-store ecosystem, for which the report provides no evidence.

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Intel soars amid retail engagement, analyst chatter

Intel ripped toward a new 52-week high Wednesday, amid a flurry of activity in the options market and a couple of positive analyst assessments ahead of its earnings report due tomorrow.

Shortly after 11 a.m. ET, call options activity was roughly equivalent to the full-day average over the past 10 sessions. Bets on stock swings using call options have become a highly popular retail trade, suggesting that retail investors are getting interested in the shares ahead of the report from the partially nationalized American chip icon.

(That interpretation is buttressed by what we’re seeing on social sentiment-monitoring sites like SwaggyStocks, which at about 11:30 a.m. listed Intel as the fifth-most-mentioned stock on Reddit’s r/WallStreetBets forum over the past 24 hours.)

Wall Street analysts are also chattering about the stock, with RBC and Bernstein Research both writing about it in the last 24 hours.

RBC — which has a “sector perform” (or neutral) rating on Intel — said it expects a “slight beat and largely inline outlook” when the company reports after the close Thursday.

Bernstein’s Intel watchers — who have a “market perform” (also neutral) rating on the stock — seemed a bit more cautious, writing, “Overall numbers going forward still looking high to us. Fundamentals and valuation keep us sidelined.”

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