DraftKings Target of Unusually Large Options Trading (NASDAQ:DKNG)

Key Points

• DraftKings saw unusually heavy options activity: Investors purchased 82,021 call options, 106% above the typical volume of 39,872, while the stock rose 6.1% to $25.70.
• Institutional investors increased their holdings, including Capital World Investors, which boosted its stake by 181.4%, and AQR Capital Management, which raised its holdings by 41.0%. Insiders also reported sizable sales conducted under pre-arranged Rule 10b5-1 plans.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and a $34.11 target price, though some firms issued sell or underperform ratings. DraftKings beat quarterly EPS expectations but reported revenue below estimates and a 4.6% year-over-year decline.

DraftKings Inc. (NASDAQ:DKNG - Get Free Report) saw some unusual options trading on Friday. Stock investors acquired 82,021 call options on the stock. This represents an increase of 106% compared to the typical volume of 39,872 call options.

Insiders Place Their Bets

In other DraftKings news, insider R Stanton Dodge sold 62,500 shares of the stock in a transaction on Thursday, June 11th. The stock was sold at an average price of $29.68, for a total transaction of $1,855,000.00. Following the transaction, the insider owned 556,258 shares of the company's stock, valued at $16,509,737.44. This represents a 10.10% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Jocelyn Moore sold 10,759 shares of the firm's stock in a transaction on Wednesday, August 19th. The stock was sold at an average price of $24.05, for a total value of $258,753.95. Following the sale, the director owned 1,881 shares in the company, valued at $45,238.05. This trade represents a 85.12% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 47.18% of the company's stock.

Institutional Investors Weigh In On DraftKings

Large investors have recently added to or reduced their stakes in the company. Vanguard Group Inc. boosted its position in DraftKings by 3.1% in the 4th quarter. Vanguard Group Inc. now owns 44,758,204 shares of the company's stock valued at $1,542,368,000 after buying an additional 1,354,457 shares during the last quarter. Janus Henderson Group PLC grew its stake in shares of DraftKings by 9.3% during the first quarter. Janus Henderson Group PLC now owns 27,665,699 shares of the company's stock valued at $588,288,000 after acquiring an additional 2,351,790 shares in the last quarter. Viking Global Investors LP lifted its stake in shares of DraftKings by 27.4% in the fourth quarter. Viking Global Investors LP now owns 19,119,912 shares of the company's stock worth $658,872,000 after acquiring an additional 4,116,561 shares in the last quarter. Capital World Investors lifted its stake in shares of DraftKings by 181.4% in the fourth quarter. Capital World Investors now owns 18,626,429 shares of the company's stock worth $641,867,000 after acquiring an additional 12,008,357 shares in the last quarter. Finally, AQR Capital Management LLC boosted its holdings in DraftKings by 41.0% in the fourth quarter. AQR Capital Management LLC now owns 16,474,009 shares of the company's stock valued at $567,694,000 after purchasing an additional 4,788,337 shares during the last quarter. 37.70% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several equities research analysts recently issued reports on the stock. BNP Paribas Exane initiated coverage on shares of DraftKings in a research report on Thursday, May 14th. They issued an "underperform" rating and a $20.00 target price on the stock. Barclays dropped their price objective on DraftKings from $35.00 to $34.00 and set an "overweight" rating for the company in a report on Monday, August 10th. Wall Street Zen lowered DraftKings from a "hold" rating to a "sell" rating in a research report on Saturday, August 15th. Weiss Ratings cut DraftKings from a "sell (d)" rating to a "sell (e+)" rating in a report on Friday, August 21st. Finally, Sanford C. Bernstein set a $27.00 price objective on DraftKings in a research note on Thursday, August 6th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating, eight have given a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $34.11.

DraftKings Stock Up 6.1%

Shares of NASDAQ DKNG traded up $1.48 on Friday, hitting $25.70. The company had a trading volume of 14,358,002 shares, compared to its average volume of 13,532,085. The company has a quick ratio of 1.02, a current ratio of 1.02 and a debt-to-equity ratio of 3.22. DraftKings has a 12-month low of $20.46 and a 12-month high of $48.78. The firm has a market capitalization of $12.76 billion, a P/E ratio of -67.63 and a beta of 1.66. The business has a 50 day moving average of $24.89 and a two-hundred day moving average of $24.53.

DraftKings (NASDAQ:DKNG - Get Free Report) last announced its earnings results on Friday, August 7th. The company reported $0.09 EPS for the quarter, beating the consensus estimate of $0.02 by $0.07. DraftKings had a negative return on equity of 11.26% and a negative net margin of 2.68%.The business had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.51 billion. During the same period last year, the business posted $0.30 EPS. The company's revenue was down 4.6% on a year-over-year basis. As a group, equities research analysts forecast that DraftKings will post 0.51 earnings per share for the current fiscal year.

About DraftKings

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings' proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.

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