Steven Murray, a director at DraftKings (DKNG), recently picked up 10,000 shares. The buy increased his stake by over 55 percent, and came to a total purchase price of just over $366,000.
This is the third director to buy in as many days, following two other insider buys last week. One director bought 7,000 shares, the other 50,000. All told, company insiders have bought over $2.5 million in recent days, marking the first buys since the firm went public.
Overall, insiders own over 7.4 percent of company shares.
One of the hottest IPOs of 2020, the current year hasn’t been as kind for the sports gambling company. A recent slide in shares has sent returns negative over the past year, with a 24 percent drop.
While the company is still in an early stage and deeply unprofitable, it has quickly become one of the largest players in the infant industry of online sports gambling, and will likely move towards profitability and grow in time.
Action to take: Investors may like shares here as a rebound play. The stock doesn’t currently pay a dividend, but has a lot of volatility to it over the course of a few months that it could return double-digit profits in a short amount of time.
For traders, the March $50 calls are aggressive, but could hit triple-digit returns on a strong enough bounce in shares. The option last went for about $1.70.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.