ARK Invest, best known for never shying away from a price drop even if the company is embroiled in controversy, has now shovelled a whooping 870,299 DraftKing shares into its portfolio, following a scathing Hindenburg Research report that sent the sport betting company’s stock tumbling.
As reported by Bloomberg, Cathie Woods’ latest stake in DraftKings is estimated to be valued at around $42.2 million, with the new shares being distributed to her Ark Innovation ETF and Ark Next Generation Internet ETF. In total, ARK now owns an aggregate of 11.3 million DraftKing shares, with a price tag of over $572.2 million.
On Tuesday, Hindenburg Research released a report alleging DraftKings has been operating in illicit gambling markets, and has been deriving over half of its revenue from Iran and China, where gambling is outlawed. “We estimate that roughly 50% of SBTech’s revenue continues to come from markets where gambling is banned, based on an analysis of DraftKings’ SEC filings, conversations with former employees, and supporting documents,” Hindenburg said.
“We think DraftKings has systematically skirted the law and taken elaborate steps to obfuscate its black market operations. These violations appear to be continuing to this day, all while insiders aggressively cash out amidst the market froth,” the report added.
However, the latest allegations do not appear to phase Wood in the slightest, as her investment fund has now added DraftKings to its long list of companies entangled in controversies. Recall, ARK bought Wirecard shares shortly after the Financial Times published numerous articles regarding the company’s financial irregularities, which ultimately led to its demise. Then, ARK bought a position in short sellers Workhorse and Vuzix, and currently holds a large stake in forever-dubious Tesla.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.