What Happened:
Shares of fantasy sports and betting company DraftKings (NASDAQ:DKNG) fell 13% in the afternoon session as betting stocks took a hit after the Illinois State Senate passed a bill proposing higher taxes on online sports betting operations. The new proposal suggests taxes paid by betting operators will increase starting on July 1, 2024 with the rate varying from 20% to 40% depending on the company's annual revenue.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy DraftKings? Access our full analysis report here, it's free.
What is the market telling us:
DraftKings's shares are very volatile and over the last year have had 17 moves greater than 5%. But moves this big are very rare even for DraftKings and that is indicating to us that this news had a significant impact on the market's perception of the business.
DraftKings is up 7.5% since the beginning of the year, but at $36.20 per share it is still trading 25.6% below its 52-week high of $48.68 from March 2024.
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