DraftKings CEO Jason Robins Dumped Stock on Day He Praised Outlook on Twitter
Posted on: March 30, 2023, 12:30h.
Last updated on: April 4, 2023, 04:36h.
On the same day he spoke optimistically about the company’s future on Twitter, DraftKings (NASDAQ: DKNG) cofounder and CEO Jason Robins reduced his equity stake in the gaming operator.
According to a Form 4 filing with the Securities and Exchange Commission (SEC), Robins sold 300K shares of the online sportsbook operator on Monday. That same day, he unleashed a “tweet storm” from which unwitting investors could perceive that he’s bullish on his company’s stock. To be clear, the tweets did not mention the shares overtly.
I’ve never been more confident about DraftKings’ future,” wrote Robins in the first of eight tweets.
He sold 300K Class A shares at an average price of $17.72 on Monday. Cofounder Matthew Kalish also unloaded 269,420 shares at that price on the same day. The stock resides at $18.76 at this writing and is higher by 7.32% over the past week.
Robins, Kalish Sales Not Necessarily Alarming
While the timing of the Robins and Kalish sales may raise eyebrows among some DraftKings investors, it could simply be a matter of the executives taking profits and diversifying personal portfolios. Entering Thursday, DraftKings’ shares were up 64.71% year to date.
The combined $10 million worth of DraftKings equity Robins and Kalish dumped on Monday is small compared to the stock awards they received as part of their 2022 compensation. While that duo and fellow cofounder Paul Liberman drew 2022 salaries of just $1, the Boston-based gaming company rewarded them with more than $120 million combined in equity-based compensation.
While some investors may argue that’s lavish pay against the backdrop of DraftKings losing more than 58% of its value last year. The company not yet being profitable. The other side of that coin is, as major shareholders in the company, Kalish, Liberman, and Robins want the stock to appreciate, as do retail investors with small stakes.
Following the Monday sales, Robins and Kalish still combine to own approximately 10 million shares of DraftKings Class A stock.
Robins Still Major DraftKings Investor
Robins, Kalish, and Liberman are the three largest individual shareholders of DraftKings equity, and the other top 10 individual stockholders are high-ranking executives or board members.
As the owner of the majority of DraftKings Class B shares, which have super voting rights, Robins, 42, also “currently possesses approximately 90% of the total voting power,” according to a regulatory document. While that confirms some level of commitment to the company, it’s also potentially risky for investors.
Due to one person, Robins, holding the majority of DraftKings’ voting power, the operator is what’s known as a controlled company. There are potential governance issues that come with that status, including the point that DraftKings isn’t required to have a majority of its directors considered “independent.” The daily fantasy sports (DFS) giant notes seven of its 11 board members are independent.
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