Michael Burry, known for his successful prediction of the 2008 housing crash, has taken a significant position in DraftKings and Flutter Entertainment, allocating approximately 60% of his investment to Flutter at around $107 per share and 40% to DraftKings at just below $26.
He believes that the current pressure on these stocks is due to the rapid growth of prediction markets, which are currently operating in a regulatory gray area. Burry anticipates that the U.S. Commodity Futures Trading Commission will eventually impose regulations on these markets, which could lead to a more favorable environment for established operators like DraftKings and Flutter.
He noted that shares of DraftKings have declined about 45% from their peak last September, while Flutter has fallen 65% from its August high. Burry expressed confidence in the operational improvements at DraftKings and the fundamental strength of Flutter, despite past capital misallocations.
Both companies are also exploring their own prediction-market offerings, which could provide them with a competitive edge as the regulatory landscape evolves