Why DraftKings (DKNG) Shares Are Getting Obliterated Today

What Happened?

Shares of fantasy sports and betting company DraftKings (NASDAQ:DKNG) fell 5.2% in the morning session after Bank of America downgraded the stock to Neutral from Buy and BMO Capital also lowered its price target. BofA analyst Shaun Kelley cut the firm's price target on the shares to $35 from $48, citing several concerns. These included sports outcomes that raised questions about volatility and long-term earnings, the company's underperformance in iGaming, and potential state-level tax headwinds. The analyst also pointed to prediction markets as a near-term challenge. Unfavorable sports outcomes meant that bettors were winning more than usual, putting pressure on profits. Adding to the negative sentiment, BMO Capital lowered its price target to $63 from $65, also pointing to unfavorable sports results in September. BMO reduced its third-quarter revenue estimate for the company as a result.

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What Is The Market Telling Us

DraftKings’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 20 days ago when the stock gained 2.1% on the news that Cathie Wood's ARK Investment Management purchased a significant number of shares in the online betting company. On October 14, 2025, the investment fund bought 236,289 shares of DraftKings, a transaction valued at $7,934,584. This purchase was reported as the largest trade of the day for ARK Investment Management. Such a substantial investment by a well-known fund signaled a bullish stance on the digital sports entertainment and gaming company, which likely boosted investor confidence and contributed to the stock's rise.

DraftKings is down 20.2% since the beginning of the year, and at $28.96 per share, it is trading 45.9% below its 52-week high of $53.49 from February 2025. Investors who bought $1,000 worth of DraftKings’s shares 5 years ago would now be looking at an investment worth $733.78.

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