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DraftKings Stock Tumbled Following Hack Report

Sam Boughedda
Sam Boughedda trader
Updated 22 Nov 2022

DraftKings (NASDAQ: DKNG) shares tumbled during Monday’s session, hitting a low of $13.37, before retracing and closing down 5% after a report from Action Network said some of the company’s users were hacked, and accounts were “cashed out.”

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Providing stories of three different DraftKings customers, the report stated they noticed suspicious transactions on their accounts on Sunday night, with one account stating a couple noticed five consecutive withdrawals of $500 coming from “DRAFTKINGS INC. BOSTON, MA.”

The same customer told the publication that after attempting to contact DK_Assist on Twitter, at least one of the replies seemed to be from a hacker, telling people how to do it and stating “free money!”

DraftKings released a statement shortly after, explaining that some customers had reported irregular activity with their accounts and they “currently believe the login information of these customers was compromised on other websites and then used to access their DraftKings accounts where they used the same login information.”

“We have seen no evidence that DraftKings’ systems were breached to obtain this information,” the company said. “We have identified less than $300,000 of customer funds that were affected, and we intend to make whole any customer that was impacted.”

Following the news, Piper Sandler released a note stating that the company is investigating but “right now, we do not know the size or the scale of the potential hacking incident, but the stock is currently reacting negatively, down over 8%.” The analyst has an Overweight rating on DraftKings with a $21 price target. Piper Sandler has an Overweight rating and a $21 per share price target on DraftKings shares.

Sam Boughedda
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.