TheScore has realized its goal of being listed on one of the major US exchanges, with the Canadian sports betting and media company making its debut on the NASDAQ late last week.
While Thursday’s launch went to plan, shares of theScore’s stock took a sudden and sharp turn upwards yesterday amid rumors that a brand takeover could be in the works, as willing suitors were making their intentions known.
Shares saw 6% gains as rumors circulated that fellow operator DraftKings was on the hunt to strike a deal that would see them acquire the Toronto-based brand. theScore was not alone, however, as other media brands are also rumored to be in DraftKing’s sights. This list included John Skipper and Dan Le Batard’s Meadowlark Media, as well as the X Games and poker brand Run It Once.
“It’s no surprise to see that all rumored targets are media companies,” stated Shadd Dales of TheDalesReport.com.
“Early returns from Michigan’s recent jump into the regulated sports betting market revealed that Penn National’s Barstool Sportsbook was the lone operator to turn a profit over the first ten days in action.”
While FanDuel and DraftKings led in terms of market share, at 28.3% and 24.5% respectively, Dales highlighted the fact that excessive marketing budgets and large bonus offerings were needed to help them narrowly edge out the new kid on the block.
“Barstool is so powerful in terms of their media presence that the brand is able to operate at significantly lower margins. Michigan gave us the first true look at just how well Barstool would perform when launching alongside their competitors rather than having to play catchup, and their ability to grab 23.9% of the market share while having less than 6% of their total handle come in the form of bonuses is about as clear of an indicator as their competitors can have.”
Both FanDuel and DraftKings saw between 15% and 20% of the total handle come in the form of bonus money.
A DraftKings spokesperson chose to neither deny nor confirm the potential targets and simply stated that “DraftKings speaks to a variety of companies regarding various matters in the normal course of business… It is our general policy not to comment on the specifics of any of those discussions.”
CEO Jason Robins spoke with DraftKings’ investors last November where he made it clear that the brand would “explore opportunistic and accretive M&A (merger and acquisition).”
Robins further elaborated on these targets, stating that DraftKings would be “considering companies that may help us fuel our growth and bring more excitement to the skin-in-the-game fans.”
DraftKings has its investor day scheduled for March 9th, where financial analyst Chad Beynon of Macquarie expects the company to more directly address its plans for further merger and acquisition opportunities.