ARK Invest Boosts Stake in DraftKings Despite Price Slump
ARK Invest has significantly increased its stake in DraftKings, adding shares to multiple ETFs. This move comes despite a recent slump in the gaming stock's price and increased competition in the prediction market.
ARK Invest, led by Cathie Wood, bought 511,049 shares of DraftKings on Wednesday, across three of its ETFs. This purchase makes DraftKings the 31-largest holding in the ARK Next Generation Internet ETF (ARKW), and the 37-largest component in the ARK Innovation ETF (ARKK). Additionally, DraftKings is now the 20th-largest holding in the ARK Fintech Innovation ETF (ARKF).
The gaming stock has been on a losing streak, dropping nearly 27% over the past month. Analysts attribute this decline to various factors, including increased volume on prediction markets like Kalshi, and customer-friendly outcomes on NFL games. However, some analysts question the prediction market volume thesis, suggesting possible double-counting of turnover on those exchanges.
DraftKings is the only gaming-related name in the ARKK portfolio, but the ETF also counts Robinhood Markets among its top 10 holdings. Other major institutional shareholders of DraftKings include leading asset management firms such as Vanguard Group, BlackRock, and State Street Corporation.
Despite recent weakness, ARK Invest's significant purchase of DraftKings shares signals confidence in the gaming stock's long-term prospects. As the only gaming-related name in the ARKK portfolio, DraftKings' performance will be closely watched. The prediction market's impact on sports betting stocks remains a topic of debate among analysts.
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