ARK Invest Continues Buying DraftKings, Genius Sports

Posted on: September 28, 2021, 10:15h. 

Last updated on: September 28, 2021, 05:17h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Cathie Wood’s ARK Investment Management remains bullish on DraftKings (NASDAQ:DKNG) and Genius Sports (NYSE:GENI) and is adding to stakes in those sports betting stocks.

DraftKings stock
ARK Investment Management, owned by Cathie Wood (seen above) continues buying DraftKings stock. She’s also a fan of Genius Sports. (Image: Business Insider)

Wood is also using pullbacks to add to those positions. For example, shares of DraftKings plunged last Tuesday when it was revealed the company is pursuing a takeover of Entain Plc (OTC:GMVHY). A day after that bid was publicized, ARK bought about $40 million worth of DraftKings stock or nearly 760,000 shares,

Of that tally, almost 600,000 shares were directed to the ARK Innovation ETF (NYSEARCA:ARKK) — the issuer’s largest exchange-traded fund. The remainder were allocated to the ARK Next Generation ETF (NYSEARCA:ARKW).

On Monday, the New York-based fund issuer made a more modest purchase in DraftKings of 131,810 shares, steering all of that buy to the ARK Fintech Innovation ETF (NYSEARCA:ARKF).

ARK Big Fan of DraftKings Stock

ARK has been buying DraftKings stock since February, and today Wood’s firm is one the largest institutional owners of the gaming stock.

As of Sept. 27, the aforementioned ARKK holds 10.41 million shares of the sportsbook operator, making the stock the fund’s 17th-largest holding at a weight of 2.56 percent. ARKW, the internet ETF, owns 3.55 million shares of the stock, making it the number 12 position in that fund at an allocation of 3.40 percent. The Fintech Innovation ETF devotes 2.18 percent of its weight to DraftKings stock, equivalent to 1.41 million shares.

The fund issuer hasn’t commented publicly on DraftKings’ effort to acquire Entain, which now revolves around a $22.4 billion cash and stock proposal. Speculation is growing that the suitor is pursuing the target for its technology in what could ultimately be the biggest acquisition to date in the sports betting industry.

The fate of BetMGM, of which Entain owns half, could determine how DraftKings’ courtship of the Ladbrokes owner goes. MGM Resorts International (NYSE:MGM) owns the other half of the online gaming entity and wants full control. If an agreement can be worked out where MGM gains that control and DraftKings focus on Entain’s other businesses and tech stack, the UK company could be acquired. DraftKings has until Oct. 19 to make a formal offer.

ARK Devoted to Genius, Too

On Monday, ARK added 53,600 shares of Genius Sports to ARKW. That doesn’t sound like much, but Wood’s firm has recently been a diligent buyer of the sports betting data provider’s shares.

Last Friday, ARK bought 89,426 shares of Genius, also directing that purchase to ARKW. The prior day, the fund manager scooped up almost 155,000 shares of that stock, adding that buy to the internet ETF. In four of last week’s five trading days, ARK accumulated Genius stock, with all those purchases allocated to the internet ETF.

ARKW holds 3.11 million shares of Genius, meaning the stock accounts for 1.07 percent of the fund’s weight.