Oct 6, 2020

Draft Kings + Michael Jordan = Stock Market 101

Michael Haddix

A lot changes when Michael Jordan is on your team -- success, championships, credibility, attention, expectations, revenue. The Last Dance made that pretty clear as have the Chicago Bulls post-Michael.

Draft Kings recognized MJ’s value and brought him on to their team in early September as a special advisor and gave him an equity interest in return. Draft Kings stock surged nearly 12% following the news and is up 40% over the past month after holding steady through most of the summer.

Michael isn’t solely responsible for Draft Kings’ recent stock market success, but it would be foolish to downplay his impact. 

Let’s break down how the market works using the MJ/Draft Kings example:

Stocks are about supply and demand, but it’s not that simple. Stocks are issued by a company in order to get capital. If a company needs money for factories, marketing, or even talent, one way to generate those funds is to issue shares. Once a share is issued it goes to the market. This is where supply and demand comes into play. The more buyers you have, the higher the demand and the higher the price.

Investors saw the MJ/Draft Kings news as an opportunity for growth. Growth equals demand. Michael’s involvement in the business generates buzz and brings more fans to Draft Kings' site (the same reason companies hire athletes to pitch product and star in commercials). His equity stake means he has a vested interest in the success of the company. And no doubt, he’s bringing other high-value people from his network to the Draft Kings table. Michael's business acumen is also key: it never hurts to have a billionaire advisor who's responsible for transforming multiple industries (namely, professional sports and footwear).

There’s a lot to succeeding in the stock market, but finding opportunities for growth is at the top of the list. When successful people like Michael Jordan are joining the team, growth and demand often follow.