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Jason Robins, CEO of DraftKings, vowed to make any seller of the company’s stock “regret that decision.”
Marco Bello/Bloomberg
DraftKings
CEO Jason Robins vowed to make any seller of the company’s stock Tuesday “regret that decision more than any other decision you’ve ever made in your life,” he said on Twitter Tuesday evening.
It is unusual for a CEO to be so outspoken about his company’s stock, but it could reflect Robins’ frustration with the weak showing of the shares.
DraftKings
stock (ticker: DKNG) has been hammered in the past six months as investors focus on the company’s heavy losses. Investors are concerned about the ultimate profitability of the online sports gambling industry given the intense competition. The company is one of the two industry leaders along with FanDuel, which is controlled by Europe’s
Flutter Entertainment
(PDYPY).
DraftKings stock fell 67 cents Tuesday, to $17.38, near its recent 52-week low. The stock is down over 35% this year and is way below a price of $64 around Labor Day. On Wednesday, the stock got a bounce, rising 2%, to $17.73.
Robins’ tweet prompted at least one response that he has been a large net seller of DraftKings stock over the past year at higher prices. On the company’s earnings conference call last month, Robins was asked why he and other DraftKings executives hadn’t bought any stock in the open market given the drop.
His response was that exercising stock options would be the “first stop” for most company executives.
“Well, I’ve been exercising options, as has several other members of our executive team, which is in effect, buying stock. So I think as long as there’s options to be exercised, that would probably be the first stop for most executives. But I can’t speak for everyone else” Robins said.
Stock options are granted to executives as part of their compensation.
The company recently held an investor day after reporting fourth-quarter earnings. At the investor day, DraftKings lifted its long-term guidance for earnings before interest, taxes, depreciation, and amortization (Ebitda) to $2.1 billion from $1.7 billion annually.
The company said in its recent earnings release that it expected to generate positive adjusted Ebitda by the fourth quarter of 2023 but expected to operate at big loss in 2022, with a projected adjusted Ebitda loss of $825 million to $925 million this year.
Write to Andrew Bary at [email protected]
Source: https://www.barrons.com/articles/draftkings-ceo-vows-to-make-stock-sellers-regret-their-decision-51646838842?siteid=yhoof2&yptr=yahoo