Shalom Meckenzie, one of DraftKings’ largest owners of common share, sold 434 million worth of sportsbook shares on 14th June. The next day, Hindenburg Research published a damaging report blasting the gaming company.
Meckenzie sold 660, 000 shares of DraftKings at an average price of $51.56 and made a profit of 434.02 million, according to Insider Arbitrage data. The shares plummeted the next day after the lengthy report emerged.
The report alleged that SBTech was operating in countries sports betting isn’t legal. The betting technology is also alleged to have ties with organized crime. SBTech was founded by Meckenzie and is currently a branch of DraftKings.
No connections have been established between the Hindenburg report and Mackenzie’s recent sale. The Israel billionaire is at stake for participating in the transaction since SBTech and DraftKings merger.
Hindenburg noted how Meckenzie had been an ardent seller of DraftKings stock for quite some time. In 2020, DraftKings gaming company sold 41.4 billion worth of shares. SBTech founder sold a third of the shares at 567.81 million.
Mackenzie’s sale has surpassed the two biggest DraftKings equity sellers. Meckenzie surpasses Director John Salter and Steven Murray’s sales combined. Meckenzie, also in a week earlier, had transferred 19 million shares to a trust for his wife and kids. That made it possible for them to dispose of $1 billion stock without the need to report.
Other sales done by Meckenzie include divesting 6.94 million shares last October and 4.63 million on 23rd June 2020. He still owns 21.52 million shares as per the Insider Arbitrage. Across industries, the company’s board members can buy and sell shares of the firm’s equity and activity that investors are keen on.
Common knowledge, when a high-ranking executive or director buys the stock, is a positive gesture. The gesture indicates that the shares will appreciate. Conversely, when an executive or director sells shares, it is a simple gesture that they need some cash to diversify their portfolio. And with Meckenzie’s recent sale and Hindenburg report coming the next day. It is was a negative gesture that came too late.