(Bloomberg) — DraftKings Inc. fell the most since March after short seller Hindenburg Research said it was betting against the online gambling company.

Boston-based DraftKings — which went public via a reverse merger in April 2020 — plunged as much as 12% Tuesday to $44.65 after the report, its lowest level since March 5 before paring some of the losses.

Representatives for DraftKings did not immediately respond to emailed and phone requests for comment.

Hidenburg disclosed a short position against the stock, meaning it will benefit from any drops in shares. The short seller has recently waged other critiques against Lordstown Motors Corp. and Nikola Corp., which contributed to heavy losses on the stocks.

The Hindenburg critique against DraftKings focused on the company’s SBTech subsidiary as well as profits made by insiders who have cashed in on the stock’s surge from its deal announcement.

Credit Suisse analyst Benjamin Chaiken defended DraftKings in a note, saying investors should use the stock’s drop as an opportunity ahead of potential gambling legalization in Canada and in New York.

Broad Declines

Weakness for sports betting companies went beyond DraftKings as the Roundhill Sports Betting & iGaming exchange-traded fund (BETZ), a sports betting and iGaming ETF, dipped as much as 2.5%. Flutter Entertainment Plc., which owns DraftKings’ rival FanDuel, fell as much as 5.5% in London.

DraftKings shares have stumbled over recent months and are down about 35% from a March record amid a dearth of top sporting events and a broader slide for high-flying companies. The company is one of a slew of startups that have gone public through mergers with special purpose acquisition companies.

The gaming company has yet to turn a profit and is not expected to post positive earnings until 2026, data compiled by Bloomberg show.

However, Wall Street analysts are broadly positive on the company with 20 rating shares a buy and eight having hold-equivalents. None rate it a sell and the average 12-month price target of $70 implies shares will rise 49% over the coming year.

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