DraftKings Insiders Liberman, Robins Dump More Than $10M in Stock
- 28 Aug 2024
- Industry News
High-ranking officials at DraftKings (NASDAQ: DKNG) are selling their shares at a rapid pace. In less than a week, co-founders Paul Liberman and Jason Robins sold more than $10 million worth of the gaming company's shares.
The Boston-based gaming company reported to the Securities and Exchange Commission (SEC) in a Form 144 filing that CEO Robins sold 20,000 shares of stock on August 21 for $6.96 million in gross proceeds. According to a second regulatory filing, Liberman, a fellow co-founder and president of Product, sold 88,441 shares on Monday for $3.23 million in gross proceeds. Both deals involved stock option exercises.
Just weeks after DraftKings unveiled its first-ever share repurchase program, which could see the online sportsbook operator buy back up to $1 billion of its stock, and as social media scrutiny of insider selling at the gaming firm grows, Liberman and Robins made their trades. In the more than four years after the company became a separate publicly traded corporation, Liberman, Robins, fellow co-founder Matt Kalish, and other DraftKings executives have been loyal sellers of the stock.
On the other hand, there hasn't been much proof of insider purchase at the business at that time. Robins, Liberman, and Kalish all make $1 a year. Nonetheless, they frequently sell shares of the business they started and receive substantial stock compensation.
Not Just Robins' Latest DraftKings Stock Sales
Robins' recent sales weren't limited to the August 21 event. The SEC claims that on August 8, the CEO of DraftKings sold 20,000 shares for $6.14 million in gross proceeds. Prior to that, on May 21, an additional 20,000 shares were sold for $8.78 million in gross revenues.
In the days preceding the operator's fourth-quarter results release, Lieberman, Robins, and General Counsel Stanton Dodge sold $78.76 million worth of DraftKings stock between late January and early February.
The sportsbook operator is one of many growing growth enterprises that frequently employ equity as a form of compensation. DraftKings insiders make a large portion of their revenues through automated trading strategies.
Nonetheless, Robins' 2022 claims are contradicted by the gaming company's widespread insider selling, especially in light of the limited purchasing. He told investors who were selling DraftKings shares at the time on X (formerly Twitter) in March of that year that they would later come to regret their choice.
Some Competitors Take Different Approaches
When it comes to extensive insider selling in the online gambling sector, DraftKings is not by itself. For instance, leaders at Rush Street Interactive (NYSE: RSI), a young, emerging-growth business, have recently come under fire from certain investors for similar actions.
High-level executives frequently receive equity remuneration across a range of businesses. Insider selling is therefore also a problem, but some businesses are more cautious about giving their executives stock options.
According to the recently released annual report of Flutter Entertainment (NYSE: FLUT), CEO Peter Jackson will receive a salary of $1.39 million for the next fiscal year, with a 400% bonus cap. In other words, Jackson will receive a maximum salary of $6.95 million for the next year, which is $100K less than the quantity of DraftKings shares that Robins sold last week.
