DraftKings CEO Jason Robins Has A Warning For Those Selling The Stock

DraftKings CEO Jason Robins Has A Warning For Those Selling The Stock

The CEO of a leading publicly-traded sports betting company has a warning for investors thinking of selling shares near the 52-week low.

What Happened: Draftkings Inc DKNG CEO Jason Robins took to Twitter Inc TWTR to share his thoughts.

The tweet didn’t go unnoticed with some calling out the rarity of a CEO cautioning a sale.

“Rare moment when a CEO directly addresses stock price. Even rarer to see a CEO take a shot,” sports betting writer Darren Rovell tweeted.

Others were quick to point out that Robins himself sold DraftKings shares in 2021. A filing from DraftKings showed that Robins owned 3,344,111 shares at the end of 2021, down from a reported 3,707,860 owned in March 2021.

Rovell has also highlighted the high amount of money — $642,950 — spent on security for Robins in 2021. The amount is more than the $630,630 paid to provide security for Apple Inc AAPL CEO Tim Cook.

Robins was also paid $14 million in 2021, which was down from $236.8 million in 2020. The CEO also received $11.3 million in equity awards in 2021.

Related Link: DraftKings Insider Trades $13M In Company Stock 

Why It’s Important: The comment from Robins could be brushed off by shareholders and investors given Robins' 2021 stock sales, large compensation package and the amount paid for security, all despite the company not being profitable. 

Shares of DraftKings are down more than 70% in the last year and have fallen 36% year-to-date in 2022.

The move down follows several other high-growth technology-related names and also comes after fears of the company’s profitability were discussed by investors.

DraftKings reported revenue of $473 million, up 47% year-over-year in the fourth quarter. The total came in above company guidance and also beat a street estimate according to Benzinga Pro.

On the earnings per share side, DraftKings posted a loss of 80 cents per share, falling shy of a street consensus estimate of a loss of 79 cents per share. This marked eight straight EPS misses versus analysts’ estimates since the company went public.

“We enter 2022 positioned to grow our market share, further optimize our user experience and continue to strengthen our multi-product suite of offerings,” Robins said of fourth-quarter results.

The company raised its fiscal year 2022 revenue guidance from a range of $1.7 billion to $1.9 billion to a new range of $1.85 billion to $2 billion. The company sees adjusted EBITDA coming in at a loss of $825 million to $925 million for fiscal 2022.

DraftKings expects to be “contribution profit positive” for fiscal 2022 across all states it is in. Without the launch of new states in 2022, the company said it would have had positive adjusted EBITDA in the fourth quarter.

In a CNBC interview after earnings, Robins said the company’s model is working and it is playing the long game.

“I can’t predict what the market is going to do,” Robins said. “We’ll play the long game here. I’m very confident that once the market settles down and rationality kicks back in, the metrics we are putting out there will start to resonate.”

DKNG Price Action: DraftKings shares are up 3.08% to $17.92 on Wednesday. Shares have traded between $16.56 and $74.38 over the last 52 weeks.

Photo: Stephen McCarthy/Web Summit via Sportsfile via Flickr Creative Commons

 

Posted In: Darren RovellDraftKingsgamblingJason RobinsNewsSports BettingManagementInsider TradesTop StoriesTrading IdeasGeneral