DKNG CLASS ACTION ALERT: Kessler Topaz Meltzer & Check, LLP Announces a Securities Fraud Class Action Lawsuit Filed Against DraftKings Inc.
RADNOR, Pa., July 21, 2021 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP announces that a securities fraud class action lawsuit has been filed in the United States District Court for the Southern District of New York against DraftKings Inc. f/k/a Diamond Eagle Acquisition Corp. (NASDAQ: DKNG) ("DraftKings") on behalf of those who purchased or acquired DraftKings securities between December 23, 2019 and June 15, 2021, inclusive (the "Class Period").
Investor Deadline Reminder: Investors who purchased or acquired DraftKings securities during the Class Period may, no later than August 31, 2021, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453; toll free at (844) 887-9500; via e-mail at [email protected]; or click https://www.ktmc.com/draftking-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=draftking
DraftKings operates as a digital sports entertainment and gaming company in the U.S. It operates through two segments, Business-to-Consumer and Business-to-Business (B2B). DraftKings provides users with daily sports, sports betting, and iGaming opportunities. It is also involved in the design, development, and licensing of sports betting and casino gaming platform software for online and retail sportsbook, and casino gaming products. DraftKings distributes its product offerings through various channels, including traditional websites, direct app downloads, and direct-to-consumer digital platforms.
DraftKings was incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of its legal predecessor, DEAC, a special purpose acquisition company. On April 23, 2020, DEAC consummated transactions contemplated by a Business Combination Agreement (the "Business Combination") dated December 22, 2019, as amended on April 7, 2020. In connection therewith, DEAC merged with and into DraftKings, whereby DraftKings survived the merger and became the successor issuer to DEAC. Also, DraftKings acquired all of the issued and outstanding share capital of SBTech (Global) Limited ("SBTech"). SBTech is a full-service B2B turnkey technology provider with omni-channel sports betting solutions, trading services, and marketing and bonus tools powering popular sports betting and online gaming brands.
The Class Period commences on December 23, 2019, when DraftKings issued a press release announcing the Business Combination. Throughout the Class Period, the defendants touted the acquisition of SBTech and its business.
The truth about SBTech was revealed on June 15, 2021, when Hindenburg Research ("Hindenburg") published a report alleging that DraftKings' merger with SBTech exposed DraftKings to dealings in black-market gaming. Citing "conversations with multiple former employees, a review of SEC and international filings, and inspection of back-end infrastructure at illicit international gaming websites," Hindenburg alleged that "SBTech has a long and ongoing record of operating in black markets," estimating that 50% of SBTech's revenue is from markets where gambling is banned."
Following this news, DraftKings' stock price fell $2.11 per share, or 4.17%, to close at $48.51 per share on June 15, 2021.
The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) SBTech had a history of unlawful operations; (2) accordingly, DraftKings' merger with SBTech exposed it to dealings in black-market gaming; (3) the foregoing increased DraftKings' regulatory and criminal risks with respect to these transactions; (4) as a result of all the foregoing, DraftKings' revenues were, in part, derived from unlawful conduct and thus unsustainable; (5) accordingly, the benefits of the Business Combination were overstated; and (6) as a result, DraftKings' public statements were materially false and misleading at all relevant times.
DraftKings investors may, no later than August 31, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)
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