DFS Biggie FanDuel Announces Reverse Merger With Platinum Eagle
The Daily Fantasy Sports giant, FanDuel, recently revealed its plans to go public by performing a reverse merger with Platinum Eagle Acquisition Corporation, which is a leading SPAC or special purpose acquisition company. The reports were first flashed across a financial website called Axios following inputs from a number of reliable sources.
In essence, an SPAC is basically a shell enterprise that although does not have an actual operation, is headed by a team of star managers. Their primary goal is to acquire other companies and provide an investment platform for them to go public. The given SPAC, Platinum Eagle Acquisition Corporation was launched by the media bigwig Jeff Sagansky, who is credited for being the Programming Senior Vice President at NBC as well as the President at CBS Entertainment and Tristar Pictures.
Given the fact that Platinum Eagle trades on NASDAQ with an IPO raise of $300 million this year, it could be a great channel for FanDuel towards securing an entry to the stock market and acquiring funding from leading investors.
Last year, the DFS giants FanDuel and DraftsKings declined their merger which in turn led to the latter’s efforts of procuring investment failing as well. The failure of the merger may be attributed to the move by Federal Trade Commission of blocking out the deal on the pretext of it creating an illegal monopoly.
The companies believed that a merger could not only help them minimize their spending on campaigning for the DFS legislation around the country but also channelize their funds in battling both the current as well as future lawsuits. In addition to this, a merger would also have eliminated the need for the two companies to spend millions of dollars in competing with each other by working towards a common goal. That being said, the failure of the merger ended up being a major strategical as well as a financial loss for both FanDuel and Draftskings that were anyway never profitable before.
A report that was recently published by the famous analysts at Eilers and Krejcik Gaming revealed that the market for Daily Fantasy Sports gaming in the United States has reached its pinnacle of success and popularity in the recent times. The report further outlined that irrespective of the demand for DFS in the country, both Draftskings and FanDuel are currently struggling with their finances to promote their annual revenues.
