High-ranking executives at DraftKings (NASDAQ: DKNG) have continued their rapid stock sales, with co-founders Paul Liberman and Jason Robins recently offloading over $10 million worth of shares in under a week.
In a Form 144 filing with the Securities and Exchange Commission (SEC), the Boston-based gaming company disclosed that CEO Jason Robins sold 20,000 shares on August 21, netting $6.96 million in gross proceeds. Similarly, Paul Liberman, the President of Product and fellow co-founder, sold 88,441 shares on August 19, generating $3.23 million, according to a separate regulatory filing. Both transactions involved exercising stock options.
These sales occurred shortly after DraftKings announced its first-ever share repurchase program, which could allow the online sportsbook operator to buy back up to $1 billion of its stock. Meanwhile, the frequency of insider selling at DraftKings has drawn increased scrutiny on social media. Since the company became a publicly traded entity more than four years ago, Liberman, Robins, and fellow co-founder Matt Kalish, along with other insiders, have consistently sold shares, with little evidence of insider buying during this period.
Despite earning a nominal $1 annual salary, Kalish, Liberman, and Robins are heavily compensated through equity and are frequent sellers of their shares in the company.
Robins’ Recent Stock Sales
Robins’ August 21 sale is just one of several recent transactions. According to the SEC, he also sold 20,000 shares on August 8, yielding $6.14 million, following a previous sale of 20,000 shares on May 21 for $8.78 million.
Earlier this year, from late January through early February, Liberman, Robins, and General Counsel Stanton Dodge collectively sold $78.76 million worth of DraftKings stock ahead of the company’s fourth-quarter earnings report.
While many of these sales occur through automated trading plans, and equity compensation is common for growth companies like DraftKings, the extensive insider selling, coupled with minimal buying, contrasts with statements Robins made in 2022. In March of that year, he publicly advised investors on social media not to sell DraftKings stock, suggesting they would later regret it.
Comparing Industry Practices
DraftKings is not alone in its insider selling trends within the online gaming industry. Executives at other emerging growth companies, such as Rush Street Interactive (NYSE: RSI), have also faced criticism for similar practices.
While equity compensation and insider selling are commonplace across various industries, some companies adopt more restrained approaches to awarding stock options to executives. For instance, Flutter Entertainment’s (NYSE: FLUT) recent annual report revealed that CEO Peter Jackson’s compensation for the upcoming fiscal year includes a $1.39 million salary with a potential bonus of up to 400%, totaling a maximum of $6.95 million—slightly less than the amount Robins gained from his recent DraftKings stock sale.
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