Jim Chanos revealed Thursday that he's been betting against DraftKings for most of 2021. "DraftKings has a valuation right now of 30 times runway revenue," the short seller said on CNBC's " Halftime Report " Thursday. "You can believe in sports betting ... but this business model is flawed." The short-seller took issue with DraftKings' massive marketing spend relative to its sales. "If you quadrupled DraftKings' revenue and gross profits ... and you take their marketing spend, which is currently over 100% revenue, [if] you take it to 10% revenue, which is their target and you keep the overhead at today's level ... DraftKings would still be losing $200 million a quarter or $800 million a year," Chanos said. "That is completely and totally insane." Shares of the sports-betting company have fallen more than 30% this year. Chanos, the founder of Kynikos Associates, is a famed short seller on Wall Street with a long history of identifying fraud. He made his name betting against energy trading company Enron in 2000 after discovering deceptive accounting practices. Some Wall Street analysts have maintained their bullish stance on DraftKings during the stock pullback, seeing it as a long-term bet on the legalization of sports-betting in the U.S. Citi recently initiated coverage of DraftKings with a buy rating , saying the company's early foothold in the sports betting market should pay off in the years ahead.
Scott Mlyn | CNBC
Jim Chanos revealed Thursday that he's been betting against DraftKings for most of 2021.