Independent Vice Chairman of the Board Of DraftKings Sold 31% Of Their Shares

We wouldn't blame DraftKings Inc. (NASDAQ:DKNG) shareholders if they were a little worried about the fact that Harry Sloan, the Independent Vice Chairman of the Board recently netted about US$9.5m selling shares at an average price of US$38.15. That sale reduced their total holding by 31% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At DraftKings

In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Jason Robins, sold US$17m worth of shares at a price of US$36.07 per share. That means that even when the share price was below the current price of US$38.91, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 11% of Jason Robins's stake.

In the last year DraftKings insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Does DraftKings Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. DraftKings insiders own about US$468m worth of shares (which is 2.5% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At DraftKings Tell Us?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing DraftKings. In terms of investment risks, we've identified 2 warning signs with DraftKings and understanding them should be part of your investment process.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com