DraftKings Insiders Sell Stock Valued at $259 Million

DraftKings insiders sold $259 million of the fantasy-sports company's shares, including $180 million sold by SBTech founder Shalom Meckenzie.

DraftKings  (DKNG) - Get Report insiders sold $259 million of the fantasy-sports company's shares, including $180 million sold by SBTech founder Shalom Meckenzie.

On June 23 Meckenzie sold 4.7 million shares at $38.80 each, a Securities and Exchange Commission Form 13-D shows.

He sold the shares to Goldman Sachs and Credit Suisse, which underwrote a secondary offering for DraftKings, the filing says.

After the transaction Meckenzie owns 30.5 million, or 8.7%, of DraftKings' shares outstanding, the filing shows.

According to Bloomberg, seven other directors and officers sold stock that day at the same per-share price.

Among them: Director Harry Sloan sold 558,700 shares for a total of $21.7 million and Chief Executive Jason Robins sold nearly 549,000 shares for $21.3 million. 

Chief Legal Officer R. Stanton Dodge sold nearly 400,000 shares for $15.5 million and Matthew Kalish president of DraftKings North America, sold nearly 330,000 shares for $12.8 million.

In addition, Chief Financial Officer Jason Park sold 76,000 shares for $2.95 million; a director, Woodrow Levin, sold 50,000 shares for $1.94 million and another director, M. Richard Rosenblatt, sold 23,700 shares for $919,000.

DraftKings shares on Friday were at last check off 7.2% to $32.85. Earlier in the session they were down as much as 9.4%.

Founded in 2012, Boston-based DraftKings went public in April through a reverse merger with a special purpose acquisition, or blank-check, company. 

Last week, analysts at Jefferies called DraftKings "best positioned to capitalize" on the growth of digital sports and wagering in the U.S. 

Analyst David Katz, who has a $55 price target on the stock, said in a note to investors said that online sports betting is in the initial stage of a "decade-long acceleration" and is projected to reach $19 billion by 2023-2025.

"We expect that post-covid, the engagement with digital leisure, the pent-up appetite for sports and political realities should position DraftKings to accel," Katz said. "What’s more, our proprietary survey supports the view that sports betting is a highly social endeavor more so under current circumstances."

Katz said the political disposition toward expansion of sports betting and internet gaming is increasingly favorable, the demand from consumers is proven, and technology is advancing the execution.

Editor's note: story has been updated to reflect that Shalom Meckenzie is the founder of SBTech, a company that DraftKings acquired.