DKNG is up 11% in a single session to $27.59, yet short interest just posted its sharpest one-day jump in weeks — a direct collision between price momentum and a short book that refuses to stand down.
The positioning picture is striking for its contradictions. Short interest climbed 8.7% on Tuesday alone, bringing the total to 8.4% of the free float — the highest level in this recent cycle and up 9.3% on the week. That adds around 3.3 million shares to the short register in one day, reversing what had been a quiet period of gradual rebuilding since the post-earnings cover in early May. The borrow market remains no obstacle to this activity: availability is at 1,060%, meaning the lending pool is essentially unlimited relative to existing shorts, and cost to borrow is just 0.57%. Shorts can add with near-zero friction. The short score has drifted up to 48.0, its highest reading of the past two weeks, consistent with the renewed building. Against all that, options traders are leaning the other way — the put/call ratio has dropped to 0.38, just above its 52-week low of 0.37, and is running below the 20-day average of 0.39. Call activity is dominant, and that skew has widened precisely as short positions were being added.
The Street broadly agrees this is a buy, though the targets tell a scattered story. UBS lifted its price target last week from $43 to $49 while keeping a Buy rating. Morgan Stanley kept its Overweight but trimmed to $39 from $40 after the Q1 print. TD Cowen reiterated Buy at $30 on Monday. The mean target across the analyst community is $34.88 — roughly 26% above the current price — but the dispersion is wide, with some targets near $30 implying limited upside from Tuesday's close. The forward earnings multiple at about 15x EV/EBITDA is the highest it has been in the past 30 days, lifted by the price move. The most notable factor score is the 12-month forward EPS growth rank, which sits in the 95th percentile — analysts have dramatically upgraded their profitability expectations — while the EPS surprise rank at just the 16th percentile suggests the company has historically tended to miss, not beat. Bulls point to market share gains, new state launches, and the predictive markets product as the growth runway. Bears flag regulatory risk, heavy customer acquisition costs, and the question of whether a 15-20x EBITDA multiple bakes in too rosy an execution scenario.
The institutional register adds one genuinely interesting data point. Spruce House Investment Management — an active manager, not a passive vehicle — added around 5.4 million shares in the quarter ending March 31, bringing its stake to 9.65 million shares or nearly 2% of the company. That is one of the larger active-manager additions in the holder table and sits alongside a meaningful build by AQR Capital Management, which added 6.5 million shares in the same period. On the insider side, activity on June 1st was mostly routine: the CFO and founders received stock awards and the CFO sold a small tranche at $26.33 — a modest tax-withholding sale rather than a directional statement.
Closest peer FLUT matched the week's move almost exactly, up 9.1% over the same period. GENI gained 11% on the week as well, suggesting a sector-wide lift rather than something idiosyncratic to DraftKings. The divergence to watch is therefore less about the macro tailwind and more about whether the rebuilding short book — adding into an 11% up day — is right that the stock is getting ahead of itself, or whether the call-dominant options market is signalling that a further leg is possible into the next earnings event on August 6.
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