DraftKings Shares Surge as Cathie Wood Trims Holdings

DraftKings stock experienced a significant jump on Thursday, signaling a bullish trend amid the winter sports season acceleration. The gambling platform’s shares continue to rise following the recent launch of its sportsbook in Vermont on January 11. Simultaneously, UBS predicts that DraftKings (DKNG) will maintain its substantial market share, while Cathie Wood and ARK Invest opted to sell a portion of their stock holdings on Wednesday. The recent sportsbook launch in Vermont marked DraftKings’ presence in the 26th U.S. state and Ontario, Canada.

In a research note on Thursday, UBS expressed confidence that DraftKings would sustain a high online sports betting (OSB) market share. Despite DraftKings’ gross gambling revenue (GGR) showing a decline over the past three months, analyst Robin Farley attributes it to the NBA season starting up in comparison to Q3. UBS, maintaining a buy rating and a $44 price target for DKNG stock, noted that DraftKings’ competition, ESPN Bet, has seen a consistent increase in OSB share but not a corresponding rise in revenue market share.

In a November 14 investor presentation, DraftKings anticipated larger and faster-growing betting participation in multiple states. The company expects the OSB and iGaming total addressable market in states it operates in to increase from $20 billion in 2023 to approximately $30 billion in 2028. This forecast did not include Vermont, emphasizing the potential for sports gambling legalization to expand into new states and areas.

On Wednesday, Cathie Wood and ARK Invest sold 229,215 shares of DraftKings from the ARK Innovation ETF (ARKK), amounting to about $8.04 million based on the $35.07 closing price. DraftKings stock saw a 7% spike on Thursday, surpassing its 50-day moving average, and regained short-term support above its 21-day exponential moving average with a 4.2% jump on Wednesday. The recent movement positions the stock in an early buy zone for investors with a higher risk tolerance. With shares rising nearly 14% this week, DKNG stock is also approaching a 39.35 buy point for a seven-week base.