DKNG has reclaimed some ground this week — up 6.3% to $25.30 — reversing part of the 6.8% slide that defined the prior note. The rebound is real, but the structural questions around prediction markets and guidance cuts that drove that sell-off remain unanswered.
The short book tells a story of gradual rebuilding, not capitulation. Short interest is running at 7.6% of the free float, up 5.3% on the week after a brief dip on Tuesday. That rebuilding has been steady rather than aggressive since the post-earnings short cover in early May, when around 5.5 million shares left the register. Borrowing costs have nudged higher — up 42% week-on-week to 0.58% — but that's still a low absolute level. Availability is extremely loose at 1,130%, meaning the lending pool is essentially wide open and there is no mechanical squeeze pressure. The short score has drifted down from 47.9 a week ago to 46.0, suggesting the overall conviction in the short thesis has softened slightly even as positions are being rebuilt.
Options are the more interesting signal here. The put/call ratio is running notably below its 20-day average — 0.38 against a mean of 0.40 — and is near its 52-week low of 0.37. That's almost 1.2 standard deviations below the mean, pointing to call-heavy positioning and a market that is leaning bullish into the move. The 52-week high on PCR was 0.77, so the current setup is near the most optimistic end of the range for the past year. Whether that reflects genuine conviction or simply short-term bounce-chasing off a weak base is the open question.
The Street has pulled in two directions since the Q1 print. Morgan Stanley trimmed its target to $39 while keeping Overweight — the clearest signal that a bellwether house still sees meaningful upside but is marking expectations down. Mizuho and Barclays both lifted targets, to $45 and $35 respectively, maintaining positive ratings. On the other side, Guggenheim cut its target from $37 to $35. The mean price target across the Street is $34.71, implying 37% upside from current levels. The bull case rests on the Super App, AI-driven product development, and a path to 30%+ EBITDA margins; the bear case centres on tax risk, competition from prediction markets, and the company's ability to find new revenue streams once core sports betting matures. The forward EPS growth score ranks in the 95th percentile — analysts are pricing in a dramatic earnings inflection — but the EPS surprise score sits at just the 16th percentile, meaning the company has a recent track record of missing those elevated expectations.
Institutional ownership showed some active accumulation in the latest quarter. AQR added over 6.5 million shares to bring its stake to 4.5% of shares. Spruce House, a specialist consumer tech manager, added 5.4 million shares to reach 1.9%. Those are meaningful increments for funds that size. The CEO Jason Robins sold a combined ~53,000 shares on June 1 at $26.33, alongside smaller sales by the CFO and Chief Legal Officer, but these appear to be routine award-related transactions given simultaneous RSU grants — trade significance scores are all at the minimum level.
The next earnings event is scheduled for August 6. That gives the stock roughly nine weeks to build a narrative around whether the Q1 guidance cut was a one-off reset or the start of a more structural downgrade cycle. With the PCR near a 52-week low, options traders are positioned for more upside — but with short interest rebuilding and prediction market competition still unresolved, the setup is less clean than the weekly bounce implies.
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