DraftKings Insiders Dump $78M in Stock Ahead of Earnings Report

Posted on: February 11, 2024, 04:00h. 

Last updated on: February 12, 2024, 11:27h.

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

High-ranking DraftKings (NASDAQ: DKNG) executives, including CEO Jason Robins, are continuing their sales of the gaming company’s stock, dumping more than $78 million worth of shares since the start of 2024.

DraftKings market share
DraftKings stock highlighted at the Nasdaq market site in New York. Insiders at the gaming company have been selling large amounts of shares. (Image: X)

According to five Form 144 filings with the Securities and Exchange Commission (SEC), Robins, fellow cofounder Paul Liberman, and General Counsel Stanton Dodge have sold $78.76 million worth of DraftKings equity since Jan. 22. Two Form 144’s filed on Feb. 8 — eight days before the operator is slated to deliver fourth-quarter results — indicate Robins and Dodge liquidated a combined $9.61 million in DraftKings stock.

After more than tripling last year, DraftKings stock is up 23.06% year-to-date, residing around 52-week highs, and climbed 4.30%, potentially signaling the sales by Robins and Dodge didn’t hinder performance.

Conversely, critics could credibly assert that a spate of insider selling days before an earnings report is a concerning sign, should be forbidden by regulators, or both.

DraftKings Insiders Continue Hitting ‘Sell’ Button

Liberman, Robins, and fellow cofounder Matthew Kalish each have a $1 annual salary. But they are heavily compensated in equity and are frequent sellers of shares of the company they founded.

The same is true of Dodge and CFO Jason Park, though neither Kalish nor Park were among the sellers mentioned in the recent batch of Form 144’s. A substantial amount of the sales by DraftKings insiders are via automated trading plans, and it’s common for many emerging growth companies — of which the sportsbook operator is one — to use equity as a form of compensation.

Likewise, insider selling at any company isn’t necessarily negative. It can simply be the result of executives wanting to access cash or diversify their personal portfolios. Form 144’s don’t include reasons for the selling.

On the other hand, and specific to DraftKings, the company will turn four years old in April as a standalone publicly traded entity, and rare are the occasions over that period that high-level insiders have been buyers of the stock.

Happy Holidays for DraftKings Insiders

It would have been nice to be on the holiday gift lists of Dodge, Kalish, Liberman, and Robins, because prior to the aforementioned January and February sales of their firm’s stock, the quartet sold a fair amount of shares in December.

Seven Form 144’s filed in the final month of 2023 indicate the quartet sold approximately $54.6 million of DraftKings stock in December. More than $52 million of that sum was attributable to Kalish, Liberman, and Robins.

It’s not clear if those sales were part of the problem, but after settling at $39 on Dec. 1, the stock closed at $35.25 on the final trading day of 2023. Still, in the span of less about 70 days, Dodge, Kalish, Liberman, and Robins have dumped $133.36 million worth of DraftKings stock.