DraftKings is set to upsize its share and pricing of its underwritten public offering of 40 million shares of Class A common stock.

DraftKings will sell 16 million shares and certain selling stockholders of DraftKings will sell 24 million shares, at a public offering price of $40 per share for a total offering size of $1.6 billion.  The selling stockholders have also granted the underwriters a 30-day option to purchase up to 6 million additional shares.

The offering was upsized from the previously announced offering size of 33 million shares. DraftKings says it intends to use the net proceeds from the offering for general corporate purposes. The company will not receive any proceeds from the stockholder share sale.

On June 17 Oppenheimer analyst Jed Kelly reiterated his buy rating on the stock with a $48 price target (18% upside potential). According to Kelly, DKNG is taking advantage of favorable market conditions to shore up its balance sheet ahead of more states regulating OSB/ iGaming. Indeed, shares have exploded by an incredible 282% since its Nasdaq debut in April.

He currently forecasts DKNG spending ~$876M on sales and marketing over the next three years, which means the company could be looking at potential acquisition/ investment opportunities. This could be in a media partnership similar to PENN/Barstool or opportunities in emerging products such as eSports.

“We believe upside is being driven by higher iGaming revenue and pentup demand for sports betting as live events (UFC/NASCAR/golf) gradually return” the analyst wrote.