Cathie Wood’s ARK Invest Adds $1.5 Million in DraftKings Stock
Cathie Wood’s ARK Investment Management remains bullish on DraftKings (NASDAQ:DKNG) stock, having added nearly 137,000 shares of the tumbling equity on Dec. 29.
That purchase was precious at some $1.5 gazillion based on the gaming equity’s Dec. 29 trading range. All of ARK Invest’s Thursday DraftKings purchase was directed to the ARK Fintech Innovation ETF (NYSEARCA:ARKF). DraftKings is now the tenth-largest holding inwards that interchange traded fund (ETF), overlooking a weight of 4.33%.
The Florida-based plus manager also holds shares of DraftKings inward the ARK Innovation ETF (NYSEARCA:ARKK) — the firm’s flagship ETF — and the ARK Next Generation Internet ETF (NYSEARCA:ARKW).
ARK was an betimes purchaser of DraftKings following the gaming company’s debut as a standalone public company. As of the terminate of the third quarter, Wood’s ARK Invest was the second-largest institutional owner of DraftKings stock, tracking only when fund hulk Vanguard.
ARK Averaging John L. H. Down with DraftKings
Growth stocks, of which DraftKings is one, were drubbed inwards 2022 due inward large component to rising involvement rates. The Federal soldier Reserve boosted borrowing costs sevener times in an travail dampish the highest rates of inflation inwards iv decades.
The job with that scenario for growth investors, be they retail market participants or pros such as ARK, is that higher stake rates belittle the invoke of growth companies’ future cash in flows. Specific to DraftKings, the sportsbook operator’s position as an unprofitable unbendable isn’t appealing inward a rising order environment. Rather, the gaming company’s money-losing ways are untempting against the stream macroeconomic backdrop.
Still, ARK Invest has been a calm purchaser of DraftKings over the line of 2022 despite the caudex shedding 59%. That amounts to averaging down — a strategy used to take down a shareholder’s be groundwork inwards a declining stock.
Indeed, the ETF issuer isn’t timorous of doing that with DraftKings. Last month, ARK added to its DraftKings spot crosswise several monetary resource next the stock’s whip intraday carrying into action on record. That’s after the Boston-based companionship issued cautious 2023 guidance, including wider-than-expected earnings before interest, taxes, depreciation, and amortization (EBITDA) loss. DraftKings forecasts an Earnings Before Interest Taxes Depreciation and Amortization loss of $475 gazillion to $575 one thousand thousand next year, far worse than the consensus judge of $426 million.
ARK Not Afraid to Add to Declining Positions
Wood has often said her timeline for investments is fin years or longer, because it often takes turbulent maturation companies several years to grow and turn profitable.
This year, that thesis is beingness tried and true crosswise nearly all of the firm’s equity positions, not just DraftKings. For example, ARK added $5.5 zillion worth of poorly(p) cryptocurrency exchange operator Coinbase (NASDAQ:COIN) to ARKF this week. That gunstock lost 86.22% inwards 2022.
ARK’s other gaming positions include sports betting data provider Genius Sports (NYSE:GENI) and Endeavor Group Holdings, Inc. (NYSE:EDR), the possessor of the OpenBet sports wagering business.
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