NEW YORK, July 02, 2021 (GLOBE NEWSWIRE) – Pomerantz LLP announces that a class action lawsuit has been filed against DraftKings Inc. f / k / a Diamond Eagle Acquisition Corp. (âDEACâ, âDraftKingsâ or the âCompanyâ) (NASDAQ: DKNG) and certain of its officers. The class action lawsuit, filed in the United States District Court for the Southern District of New York, and registered as 21-cv-05739, is in the name of a group consisting of all persons and entities other than the defendants who purchased or otherwise acquired securities of DraftKings between December 23, 2019 and June 15, 2021, both dates inclusive (the âClass Periodâ), seeking to recover damages caused by Defendants in violation of federal securities laws and to exercise remedies under sections 10 (b) and 20 (a)) of the Securities Exchange Act of 1934 (the âExchange Actâ) and rule 10b-5 promulgated thereunder, against the Company. and some of its senior officials.
If you are a shareholder who purchased securities of DraftKings during the Class Period, you have until August 31, 2021 to ask the court to appoint you as the lead plaintiff for the Class Action. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those inquiring by e-mail are encouraged to provide their mailing address, telephone number and the number of shares purchased.
[Click here for information about joining the class action]
DraftKings operates as a sports entertainment and digital games company in the United States. It operates through two segments, Business-to-Consumer and Business-to-Business. The Company provides users with daily sports, sports betting and iGaming opportunities. She is also involved in the design, development and licensing of sports betting and casino gaming platform software for online and retail sports betting and casino gaming products. The Company distributes its product offerings through a variety of channels, including traditional websites, direct app downloads and digital platforms directly to consumers.
DraftKings was incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of its legal predecessor, DEAC, a Special Purpose Acquisition Company, or SPAC. On April 23, 2020, the DEAC concluded the transactions contemplated by a business combination agreement (the âBusiness Combinationâ) dated December 22, 2019, as amended on April 7, 2020, and, in this context, ( i) DEAC merged with and into the Company, whereby the Company survived the merger and became the successor issuer of DEAC, (ii) the Company changed its name to âDraftKings Inc.â, (iii) the Company acquired DraftKings Inc., a Delaware corporation (âOld DKâ), by way of amalgamation, and (iv) the Company acquired all of the issued and outstanding share capital of SBTech (Global) Limited (â SBTech â). Upon completion of the previous transactions, Old DK and SBTech became wholly owned subsidiaries of the Company.
The complaint alleges that throughout the Class Period, the Defendants made materially false and misleading representations regarding the Company’s business, operations and compliance policies. Specifically, the defendants made false and / or misleading statements and / or failed to disclose that: (i) SBTech had a history of illegal operations; (ii) as a result, the merger of DraftKings with SBTech exposed the Company to black market gaming transactions; (iii) the foregoing increased the Company’s regulatory and criminal risks with respect to these transactions; (iv) due to all of the above, the Company’s income was derived, in part, from illegal and therefore unsustainable behavior; (v) as a result, the benefits of the business combination have been overstated; and (vi) accordingly, the Company’s public statements were materially false and misleading at all material times.
On June 15, 2021, Hindenburg Research (âHindenburgâ) released a report on DraftKings, alleging that the company’s merger with SBTech exposed DraftKings to black market gaming transactions. Citing “conversations with several former employees, a review of the Securities and Exchange Commission and international filings, and the inspection of the back-end infrastructure on illicit international gambling websites,” Hindenburg asserted that “SBTech has a long and continuous experience in black markets, âEstimating that 50% of SBTech’s revenues come from markets where gambling is prohibited. ”
Following the release of the Hindenburg report, the DraftKings share price fell $ 2.11 per share, or 4.17%, to close at $ 48.51 per share on June 15, 2021.
Pomerantz, with offices in New York, Chicago, Los Angeles and Paris, is recognized as one of the leading firms in the areas of corporate law, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the Dean of the Class Actions Bar, Pomerantz was a pioneer in the field of securities class actions. Today, more than 80 years later, Pomerantz continues the tradition it established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and professional misconduct. The firm has recovered numerous multi-million dollar damages on behalf of the members of the group. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext 7980