Welcome To Our Weekly Text Messages

Kyle: I actually think DK is a buy. Investors can be stupid. They want companies to grow but penalize them for unclear path to profitability. DK has one. They keep saying it takes about 3-4 years after a market launches to be profitable. They have the data. NY launched last year. The big spend is at launch, and NY is the biggest so far:

Fixed launch spend -> big market -> lose money in the near-term.

Jason: State launch cadence actually seems favorable at this point. Turtle like movement of casino legislation is the real killer here. Brand is very strong, they just need to survive at this point. Super Apps are coming soon, they are well positioned. NY or IL online casino is major game changer. Slowing of ad spend will keep regulators at bay for now.

They’ll do it again for Ohio. I get why FL, TX and CA one day might lose even more money short-term, but there’s a clear metric to turn a profit for DraftKings. I think they are among, if not the, best of breed when it comes to sportsbooks. Of course… they could run out of cash if too many states launch too soon. 1.4 bil on the books and spend 500 mil per launch, something like that. 4 launches… something something negative numbers.

Jason: Feels like Bravo type approach with housewives…..you don’t know any of these people but they are entertaining and you will watch. Do that, but for the surf league. Local events. Come see your favorite reality surfer in Florida, the Jersey Shore, California. Big draw.

Kyle: I wrote 2,000 words about why I hated this and you may have just convinced me it's brilliant by evoking the Housewives. F off.

Kyle: Good news: It was frontloaded. Bad news: $115 million is gone.

Jason: Well they are SOL

It was inevitable SBF would pop the Miami crypto bubble.

Did anyone check in on the MLB umpires? At this point, we might as well just put a sportsbook in place of the FTX logo.

14 years of extreme frothy like growth/spending/greed has finally hit a wall. This will be a good thing overall. Back to some basics of DD and profit.