DraftKings Director Shalom Meckenzie Continues Dumping Stock

DraftKings (NASDAQ:DKNG) board member Shalom Meckenzie continues selling shares of the sportsbook operator. The Israeli billionaire recently sold 660,000 shares of DraftKings in a series of four transactions at prices ranging from $59.96 to $62.80.

A Form 4 filing with the Securities and Exchange Commission (SEC) released late Tuesday indicates that the recent sales were made on Sept. 13,

Meckenzie hauled in $39.9 million via the latest sales, trimming his stake in Boston-based DraftKings by three percent. His latest divesture of the gaming company’s shares comes about three months after he sold the same amount of DraftKings stock.

On June 14, Meckenzie sold 660,000 shares of DraftKings at an average price of $51.56, for proceeds of $34.02 million, according to Insider Arbitrage data.

Big Owner, Seller of DraftKings Stock

Meckenzie’s involvement with the company comes by way of him founding SBTech, an Israeli sports betting technology platform provider that came together last year with DraftKings in a reverse merger with a special purpose acquisition company (SPAC).  The transaction set the stage for the combined entity to go public as DraftKings.

On that basis, he’s still the largest individual owner of DraftKings common stock and the third-largest owner overall behind fund issuers Vanguard and T. Rowe Price.

Meckenzie took some criticism for his June share sale. It was disclosed just a day before Hindenburg Research revealed a short position in the gaming stock while publishing a scathing research report on the DraftKings. In that report, the short seller alleges Meckenzie’s SBTech operates in countries where it’s not permitted to do so. It also reports that he is engaged in money laundering, and has ties to organized crime.

Hindenburg also alleges Meckenzie transferred a substantial amount of his DraftKings equity into his wife’s name to avoid SEC reporting requirements when trimming that stake.

DraftKings Stock Reaction

Shares of DraftKings are lower by 0.75 percent, but it’s unlikely Meckenzie’s share sale is the sole reason for that modest decline. Gaming equities are scuffling this week, and sports betting names are succumbing to some profit-taking.

Still, the arrival of football is viewed as a major catalyst for sports wagering stocks, including DraftKings. Some analysts forecast upside to third- and fourth-quarter revenue estimates for the group.

On Tuesday, Wells Fargo analyst Daniel Politzer initiated coverage of DraftKings stock with an “overweight” rating and a $73 price target, which is above the Wall Street consensus of $70.