DraftDay, the daily fantasy sports site, has agreed to be acquired by MGT Capital Investment, Inc.
The deal between CardRunners Gaming, Inc. and MGT is for a reported $600,000 in cash along with 100,000 shares of common stock. As the time of this writing, MGT (NYSEMGT: MGT) was trading at $1.97 per share and well off of its 52 week high of $5.40.
This acquisition by MGT adds to its portfolio of mobile and online gaming which also includes another fantasy sports investment, FanThrowdown.com who is operated by FanTD LLC.
FtSb Says: DraftDay is in an increasingly competitive market for daily fantasy sports. Among the leaders in the space include FanDuel and DraftKings. When considering just market share value of the price of stock when the deal was made and the $600,000 in cash, DraftDay was bought for approximately $800,000.
To put in context, DraftKings secured $24 million in Series B funding last year with FanDuel clearing $11 million in January 2013. The reason for the acquisition remains open. Did DraftDay need to be bought or risk closing its door or was this a financial investment by MGT in a growing daily fantasy sports market. Earlier this year we did predict that the daily fantasy market would grow but that there would be consolidation in the industry.
