DraftKings Calls Public Warrants for Cash Exercise

This morning, DraftKings (DKNG), which recently combined with Diamond Eagle Acquisition Corp., announced they will be redeeming all of their public warrants that remain outstanding at 5:00 p.m. New York City time on June 26, 2020 (the “Redemption Date”) and are requiring a cash exercise.  However, the private placement warrants that are held by the founders of Diamond Eagle Acquisition Corp. and former shareholders of DraftKings Inc., are not subject to this redemption.  It’s good to be the “King”.

All public warrants may be exercised at the exercise price of $11.50 per share and by requiring an exercise for cash DraftKings will raise approximately an additional $153 million in proceeds.

Any public warrants that remain unexercised following 5:00 p.m. New York City time on June 26, 2020 will be void and no longer exercisable, and the holders of those public warrants will be entitled to receive only the redemption price of $0.01 per warrant.

When your share is trading near $33.00, calling the warrants is not unexpected.  Now DKNG gets to eliminate the public warrant overhang which makes any additional financings a lot easier.  And they get some cash for it to boot.