The Walt Disney Firm owns greater than 18.2 million shares of DraftKings inventory after the operator’s merger with SBTech and itemizing on Nasdaq final week.
Paperwork filed Thursday with the Securities and Change Fee (SEC) present Disney owns 6% of DraftKings’ inventory. The USDDKNG share worth closed at USD19.46 on Thursday, up 6 cents from Wednesday.
That pegs the worth of Disney’s funding in DraftKings at greater than USD364 million. Disney acquired that stake in a large deal to buy twenty first Century Fox in March 2019.
DraftKings went public with an preliminary market cap of USD6 billion final week. Its share worth has fluctuated between roughly USD17 and USD20 since happening provide.
Disney a ‘passive’ investor
The Schedule 13G submitting designates Disney as a “passive investor” underneath Rule 13d-1(c) of the Securities and Change Act of 1934.
That classification doubtlessly helps Disney keep away from hefty charges associated to further authorities disclosures underneath the Hart-Scott-Rodino (HSR) Antitrust Enhancements Act.
The passive designation prevents Disney from taking an energetic function within the operator’s board or operations. It additionally means Disney can not put money into any direct opponents of DraftKings whereas sustaining passive standing.
The submitting, due to this fact, seems to make away from Disney’s plans for its funding within the close to time period. When it first took on Fox’s curiosity final yr, business hypothesis swirled about whether or not Disney would possibly try and buy the operator outright.
Monitoring the DraftKings funding
Fox invested USD160 million in DraftKings in July 2015, on the peak of the corporate’s success in daily fantasy sportsbook.
It wrote down that funding by 60% simply months later, citing considerations in regards to the operator’s valuation:
“… based mostly on info regarding DraftKings’ present valuation in a current financing transaction, the Firm decided {that a} portion of its funding in DraftKings was impaired and recorded a lack of roughly USD95 million …”
Fox took its curiosity shortly after a long-rumored deal between the operator and Disney fell by way of. That USD250 million association fizzled, though DraftKings nonetheless inked an unique DFS cope with ESPN, which is owned by Disney.
How DraftKings went public
Diamond Eagle Acquisition Corp. paid USD2.7 billion in money and inventory for each the sportsbook betting operator and provider SBTech in a reverse merger. That construction helped DK keep away from an IPO.
DraftKings sees the majority of the cope with USD2.055 billion in money and inventory. CEO Jason Robins acquired Class B shares that give him about 90% of capital inventory voting energy.
Disney maintains shareholder voting energy with its 6% stake. The leisure large reportedly is price round USD130 billion and its share worth closed at USD108.15 on Thursday.
Additionally listed within the SEC submitting are a handful of Walt Disney Company subsidiaries:
- TWDC Enterprises 18 Corp.
- Disney Enterprises, Inc.
- TFCF Company
- TFCF America, Inc.
- TFCF Sports activities Enterprises LLC