Fandual/Draftkings Cash Flow Problems? (1 Viewer)

[James Daulton]

Cash flow issues are usually the death knell of an organization.  Time to pull our cash out?

http://deadspin.com/report-draftkings-and-fanduel-arent-paying-vendors-ha-1788131122

 

[Tennessee_ATO]

I wouldn't worry too much -- yet. A merger has always made sense and has been rumored to be in the works for months. As long as they can continue to fill contests I think they'll be ok since they aren't setting their money on fire in their 2015 death-spiral of battling each other for market share. The NBA is kicking off so that should help with cash flow -- actual daily contests means daily rakes. And I think they get more daily action in the NBA than MLB. 

 

[Devin Knotts]

For them to put out a $1M opening night NBA game on a 3 game slate they have to know that it was going to overlay. If they were on the verge of insolvency they would not be offering contests knowing that they're likely going to overlay if you're close to insolvency.

I can confirm the layoffs at FanDuel as true, although I don't know the specific numbers. However, having worked with a few startups in my past, I will say that layoffs are inevitable when growth stops, as you don't look at your cost structure as closely as you should when everything is focused on growth. Once the growth slows down you look to increase profitability. 

 

[Tennessee_ATO]

For them to put out a $1M opening night NBA game on a 3 game slate they have to know that it was going to overlay. If they were on the verge of insolvency they would not be offering contests knowing that they're likely going to overlay if you're close to insolvency.

I can confirm the layoffs at FanDuel as true, although I don't know the specific numbers. However, having worked with a few startups in my past, I will say that layoffs are inevitable when growth stops, as you don't look at your cost structure as closely as you should when everything is focused on growth. Once the growth slows down you look to increase profitability. 

That million filled. Early season NBA action is crazy on FD. I think it's a combo of NFL guys looking for a midweek fix, gaps in pricing early in the season, and sharps looking to take advantage of both of those situations.