DKNG has added 3.3% on the week to $28.51, and the contradictions flagged in our last note are beginning to resolve — shorts are quietly trimming while call buyers grow more confident, a setup that looks increasingly one-directional heading into the August 6 earnings date.
The short book has pulled back slightly from the peak identified last week. Short interest now sits at 8.3% of the free float, down from 8.4% on June 10, with roughly 41.3 million shares short — a modest one-day decline of 0.7% on June 16. The week-on-week change is still up 8.1%, so the bigger picture is a short book that rebuilt sharply into the previous rally and has only just begun to fade. The borrow market is no constraint either way: availability has widened back to 1,210%, the loosest it has been in this cycle and well above the 52-week low of 462%. Cost to borrow remains negligible at 0.56%. There is no squeeze pressure here — shorts face zero friction to hold or add. Options traders are sending a cleaner directional message. The put/call ratio dropped to 0.37 on June 16, essentially matching the 52-week low of 0.37 and running more than a standard deviation below the 20-day average of 0.39. Call dominance is at its most extreme of the past year, a direct contrast to the short book still sitting above 8% of float. The two signals are in tension: options traders are positioned for upside; short sellers have not capitulated.
The Street is broadly constructive, though target prices reveal a wide dispersion. UBS raised its target to $49 on June 5, the most aggressive print on the board. Morgan Stanley trimmed slightly to $39 while keeping Overweight. TD Cowen reiterated Buy at $30 — only fractionally above the current price of $28.51. The consensus sits at Buy with 22 buy ratings and 6 outperforms, but the $30–$49 target range reflects genuine disagreement on how fast the profitability inflection arrives. The bull case rests on market share durability, the super-app strategy, and a forward earnings trajectory that ranks in the 95th percentile of the ORTEX universe for 12-month EPS growth. Bears point to state tax escalation risk and competition compressing margins before the EBITDA inflection — the stock's EV/EBITDA multiple has eased to 15.6x over the past month, still not cheap on current-year numbers. The short score has nudged down to 47.4 from 48.1 earlier in the week, consistent with the marginal short covering.
On the ownership side, AQR added 6.5 million shares in Q1 — the most aggressive institutional build in the top-holder list. Spruce House added 5.4 million. Both are active managers making deliberate sizing decisions, not passive flows. Against that, insiders have been net sellers in recent weeks. The CLO sold roughly $1.85 million of stock on June 11 at prices around $29.65–$29.97. CEO Jason Robins sold $178K on June 1. These are routine-looking in size and follow stock awards, but the direction is consistent — no insider has been a buyer over the reported window. The 90-day net insider figure is technically positive at $4.7 million, but that reflects award accounting, not open-market conviction.
The last earnings print on May 7 produced a 6.7% one-day gain and a 5.1% five-day gain — the best single-day reaction in the recent history table. The next event is August 6. With the short book still elevated, call skew near annual extremes, and a wide analyst target range, the August print is shaping up as a genuine asymmetry event — the question worth tracking is whether the shorts close further into that date or whether call-side confidence fades first.
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