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• Burry attributed the pressure on FLUT earnings to prediction markets, citing Kalshi’s nearly $40 billion annual volume and their claimed federal exemption from state gaming taxes.
• The investor more than doubled his Flutter stake at an average cost in the high $90s, calling it a “fat pitch,” and sold his DraftKings shares.
• Flutter-peer DraftKings is slated to announce its own Q2 report on Thursday.

Flutter Entertainment (FLUT) shares dropped sharply on Wednesday and closed down 11% after the online betting giant posted mixed second-quarter results, cut full-year guidance, and announced a CEO change.

FLUT stock clocked its worst day since February 27. The drop also pulled peer DraftKings (DKNG) 8% lower ahead of its own report slated for Thursday.

Michael Burry’s Take On The Selloff

Investor Michael Burry, in a Substack post, zeroed in on the numbers that rattled the market.

He pointed out that Flutter’s U.S. profits plunged 70% to $119 million. For FanDuel owner Flutter, U.S. revenue fell 6%, with the sportsbook down 15% and total bets rising just 2%; promotional costs also increased.

Burry said the guidance cut came from U.S. weakness, which pushed the company’s debt higher to 4.3 times earnings from 3.7 times. He noted CEO Peter Jackson is stepping down after nine years, to be replaced by Dan Taylor from the stronger international side.

Burry attributed the pressure to prediction markets, citing Kalshi’s nearly $40 billion annual volume and their claimed federal exemption from state gaming taxes. He argued that Flutter and DraftKings are smart to build their own prediction-market platforms instead of fighting the trend, and sees a long-term opportunity if the Supreme Court eventually tightens rules or taxes. Burry more than doubled his Flutter stake at an average cost in the high $90s, calling it a “fat pitch,” and sold his DraftKings shares.

Wall Street Weighs In

Jefferies called the “Beat; Cut; New CEO” Flutter package messy reading, yet stayed constructive. The firm said a second-half adjustment was widely expected; the revised guidance now makes sense, the incoming CEO knows the company inside out, and prediction markets are demonstrably incremental. It kept a ‘Buy’ rating and $210 target.

Truist’s Barry Jonas, meanwhile, cut his price target to $120 from $130 while retaining a Buy. The analyst also lowered his 2026 core profit forecast by 7% and his 2027 estimate by 4%.

Mixed Quarter Results

Earlier on Wednesday, Flutter reported that its overall Q2 revenue rose 3% to $4.326 billion, helped by acquisitions, strong FIFA World Cup activity, and international growth. Adjusted core profit dropped 45% to $508 million, and the company posted a $296 million net loss versus a $37 million profit a year earlier.

U.S. sportsbook results improved from the prior quarter thanks to new loyalty and protection features, while prediction-market activities are expected to add about $50 million this year.

Full-year guidance was lowered by $395 million on revenue to $17.91 billion at the midpoint and by $210 million on adjusted core earnings to $2.655 billion to fund extra second-half spending on FanDuel. CEO Peter Jackson will hand over to Dan Taylor, currently Flutter president and international chief, on October 1, the firm added.

How Did FLUT Retail Traders React?

On Stocktwits, retail sentiment around FLUT stock rose from ‘neutral’ to ‘bullish’ over the past 24 hours, while message volume increased from ‘normal’ to ‘high’ levels.

Meanwhile, sentiment around DKNG stock rose from ‘bearish’ to ‘bullish’ over the past day, while retail chatter rose to ‘high’ levels.

A Stocktwits user said DraftKings CEO Jason Robins should just shut down all the regular sports-betting apps in the states and only run prediction-market products instead.

https://www.stocktwits.com/Chaco14/message/661049430

Another user opined that the worst of FLUT’s price drop is probably over, making it potentially attractive for investors willing to take the risk of buying a beaten-down stock.

FLUT stock has fallen 57% year-to-date, while DKNG stock dropped 37%. 

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