Dodge R. Stanton, the Chief Legal Officer of DraftKings Inc. (NASDAQ:), recently sold shares of the company’s Class A Common Stock, according to a filing with the Securities and Exchange Commission. On December 9, Stanton sold 228,496 shares at a weighted average price of $42.74 per share, amounting to a total value of approximately $9.77 million. The sale comes as DraftKings demonstrates strong momentum, with revenue growing 40% year-over-year and analysts maintaining a bullish consensus on the stock. According to InvestingPro, analyst price targets range from $33 to $77 per share.
In addition to the sale, Stanton exercised stock options to acquire 479,807 shares of Class A Common Stock at a price of $2.95 per share. This transaction was necessary to fund the option exercise price and related tax obligations. Following these transactions, Stanton holds 541,884 shares directly in the $20.3 billion market cap company.
The filing also disclosed that Stanton entered into a prepaid variable forward sale contract involving 500,000 shares of DraftKings’ Class A Common Stock. This contract obligates Stanton to deliver shares to a third-party buyer by November 2026, in exchange for a cash payment of $17.6 million received by December 10, 2024. The terms of the contract allow Stanton to retain voting rights for the pledged shares during the contract term. For comprehensive insider trading analysis and additional insights, access the detailed DraftKings research report on InvestingPro, which includes over 30 key metrics and financial health indicators.
In other recent news, DraftKings reported a substantial 39% year-over-year increase in revenue, reaching $1.95 billion, despite a $59 million adjusted EBITDA loss. Looking ahead, the company’s future outlook includes generating approximately $850 million in free cash flow in fiscal year 2025, with revenue guidance set between $6.2 billion and $6.6 billion, and adjusted EBITDA guidance ranging from $900 million to $1 billion. Analyst firms BTIG, TD Cowen, and Goldman Sachs have maintained their Buy ratings on DraftKings, with price targets at $55 and $57 respectively.
The management team at DraftKings highlighted the significant Total (EPA:) Addressable Market opportunity that still exists, noting robust new customer acquisition trends. They also pointed to improvements in customer Lifetime Value and a clear path toward new state legalization, including Missouri, which could further expand their market presence. Despite these developments, the company maintains a cautious outlook on customer acquisition spending due to a competitive environment.
DraftKings’ strategy also includes a path to increasing profitability and Free Cash Flow conversion. This financial approach is expected to support reinvestment in the business, including launches in new states, and to potentially return capital to shareholders. The company currently has a $1 billion authorization for such purposes. DraftKings intends to enhance its shareholder relations with regular disclosures around Online Sports Betting and iGaming.
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2024-12-12 03:21:53
