Shares of DraftKings (DKNG) fell 10.2% over the past week, dropping to $31.16 from $34.70, coinciding with a dramatic collapse in retail investor sentiment on Reddit. Just one month ago shares were as high as $48 per share.
The stock’s approach to 52-week lows has triggered a sharp reversal in online discussion, with sentiment on r/wallstreetbets plummeting from neutral-positive territory to outright bearish within 24 hours. The shift reflects growing concern among retail traders about the stock’s technical breakdown and sustained unprofitability, despite Wall Street’s continued bullish outlook.
Reddit Sentiment Shifts Hard Negative Amid Price Pressure
Reddit sentiment tracking shows a critical deterioration. On Monday, October 27, discussions hovered around 61 (neutral-positive) with strong engagement. By Tuesday morning, sentiment had collapsed to 41 (bearish) and remained locked at that level through Wednesday morning. Peak activity hit 2,123 upvotes and 94 comments on Tuesday at 9am ET, but engagement has since cratered 68% to just 130 upvotes and 9 comments.
The discussion has shifted from speculative optimism to concern about fundamental weakness. A notable r/stocks post titled “Is DraftKings in trouble?” from October 26 captured the emerging skepticism, generating 32 comments despite modest upvotes. And there are real reasons to be concerned.
- Draftkings is not profitable
- The company faces major competition from Kalshi, Fanatics, and Polymarket
- Marketing costs are extremely high and potentially unsustainable, despite CAC improving 20% YoY
On the flipside, Draftking’s Average Revenue per Monthly Unique Payer (ARPMUP) improved to $151 in Q2, 2025. So there are some things to be optimistic about.
Wall Street Remains Bullish While Technicals Signal Trouble
The sentiment divergence between retail and institutional investors is stark. Despite retail capitulation, analysts maintain a 29-to-5 buy-to-hold ratio with a consensus price target of $50.80, implying 63% upside from current levels.
The company trades at an extreme 17.16x price-to-book ratio for an unprofitable business. That said, revenue growth of 36.9% year-over-year and quarterly earnings improvement of 184.6% suggest a path to profitability.
With no major news catalyst driving the decline, retail appears to be reacting purely to technical deterioration and price action, suggesting the selloff may have further room if the stock breaks below $30.
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