2023-11-28 04:40:33 ET
DraftKings (NASDAQ: DKNG) stock price has done well in the past few months. The shares jumped to a high of $38.75, the highest point since November 21st. They have soared by over 305% from the 2022 low of $9.80.
A closer look at DraftKings insider transactions shows that a few of the top holders are selling their shares. According to MarketBeat , insiders have been selling their shares in the past few years. In the past 12 months, 6 insiders have sold shares worth over $137 million.
In the current quarter, they have exited stakes worth almost $50 million and the trend could go on. The most recent big seller was Jason Park, the company’s CFO who sold shares worth over $28 million. He has now sold 87% of his total stake in the company.
Insiders dumping their shares is always a big deal since they usually have more information than ordinary investors. A look at some of the past top corporate collapses like First Republic and Silicon Valley Bank shows that insiders were actively exiting their positions before they collapsed.
Therefore, the fact that DraftKings CEO, CFO, and other insiders are selling their shares is a red flag. However, the silver lining is that insiders still hold a huge stake in the company. Data shows that insiders still own over 55% of the firm while institutions hold 32.84%.
In most cases, insiders usually own a small part of the company. Meta Platforms insiders own 13% of the social media giant. Apple insiders hold just 0.06% stake while Dropbox hold 25%. The most recent results revealed that DraftKings business did well in the third quarter. Its revenue jumped by 57% YoY to over $790 million while its EBITDA improved to -$153 million. As a result, it upgraded its full-year revenue guidance to between $3.67 billion and $3.72 billion.
The post DraftKings insiders are dumping the stock but it’s not a big deal appeared first on Invezz