Posting date: May 24, 20,23, 06h17.
Last updated: May 24, 2023 at 06:17h
There’s an old financial market saying that goes “Sell in May and go away.” DraftKings (NASDAQ: DKNG) insiders aren’t going away, but they sure are selling their company’s shares this month.
With the shares up 11% in May and 112% year-to-date, insiders, including co-founders Matthew Kalish and Paul Liberman, are reducing their stakes in the gaming company. Kalish and Liberman founded DraftKings along with Jason Robins, who controls the majority of voting stock of the sportsbook operator. According to SEC filings, this lowered his stake in the daily fantasy sports provider (DFS), reducing it to 2,754,910 share. This followed three outright sale in March. According to Form Fore, a research company that specializes on Form-4 documents analysis, Kalish had 2,783,219 common equity shares as of May 9. Kalish was the top seller that week with $8.98m, followed by Robins at $4.86m. During that week, Liberman dumped $3.24 million worth of the company’s shares while CFO Jason Park pared his stake by $2.80 million.
Speaking of Liberman, Park…
Following two March sales, Liberman sold another 133,333 DraftKings shares on May 9, reducing his position in the common equity to 1.39 million shares, but that figure later increased to 1.72 million following an acquisition, according to the regulatory filings.
In terms of sheer activity, CFO Park appears to be one of the busiest insider sellers of DraftKings. According to the SEC, after four transactions in February and three more in April, the gaming firm’s financial chief engaged in seven sales this month. If that’s accurate, it likely won’t be the case for long because DraftKings — as is the case with many emerging growth companies — frequently uses stock as a form of compensation.
Kalish, Liberman and Robins have a $1 annual salary each, but they also received north of $120 million combined last year in equity-based compensation.
DraftKings Insider Sales Cause for Scrutiny, But…
Due to higher ownership of the stock among retail investors, DraftKings insider sales often draw criticism and scrutiny on social media. Indeed, Guru Focus data confirm that since the start of 2023 the only insider transactions in the stock have been sales — no buys.
However, closer examination is warranted. The volume of insider sales at DraftKings has declined in notable fashion following a massive spike in the months following the operator’s 2020 initial public offering (IPO).
Additionally, while Kalish, Liberman and Robins are ringing the register on portions of their holdings, they remain the three largest insider holders of DraftKings equity. Vanguard is the biggest institutional owner of the stock