DraftKings Stock Falls More Than 10% on News of Hacking that Wiped User Accounts

Maryam Nasir
by: Maryam Nasir
DraftKings Stock

DraftKings Stock (DKNG:NSD) Analysis:

Last Closing Price: $14.69

Consensus Rating: Strong Buy

12-Month Price Target: $22.47

Market CAP: $6.76 Billion

 

DraftKings stock (DKNG:NSD) shares plunged in midmorning trade on Monday after The Action Network reported that user accounts had been stolen.

According to the news source, a number of customers were subjected to large withdrawals and locked out of their accounts after hackers altered login credentials. The corporation reported an account issue via its customer service Twitter account on Sunday evening.

The tweet stated, “We are aware of reports of consumers experiencing troubles with their accounts and are conducting an investigation.” Please contact the Customer Experience Team at support@draftkings.com if any of your accounts are experiencing problems.

A number of customers responded angrily to the tweet, echoing the report’s findings.

“I sent many messages to the “24/7″ support team as my money was being taken,” stated one response. “Could have been easily prevented in real time as I quickly recognized the fraud, but nobody was present on the two busiest sports betting days of the week.”

The company informed that the DraftKing website was not hacked, but that users’ login information had been obtained via other websites where the same credentials were used.

Paul Liberman, co-founder and president of global technology and product, said in a statement, “We have seen no evidence that DraftKings’ systems were accessed in order to obtain this information.” We have detected fewer than $300,000 in affected consumer cash, and we intend to compensate all affected customers.

Shortly after the release of the report, shares of the Boston-based online gambling company (Draftkings Stock) plummeted 10.23%, but losses reduced to approximately 5% by the afternoon.

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