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DraftKings Stock Rally Faces Uncertainty as Cathie Wood Sells Shares

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The DraftKings stock has been a reliable choice for investors throughout the year, but renowned investor Cathie Wood appears to have a different perspective on its future prospects.

Wood’s flagship ARK Innovation exchange-traded fund (ticker: ARKK) recently sold a total of 228,108 shares of DraftKings (DKNG). The sale, which took place on Tuesday and Wednesday, amounts to $8.8 million based on the closing prices and the number of shares sold on both days.

DraftKings’ stock has witnessed an impressive surge of 240% in 2023, prompting Wood to take advantage of the gains. Investor’s Business Daily reported that the ARK Innovation fund sold $35 million worth of DraftKings stock earlier this month on two consecutive trading days (Nov. 10 and Nov. 13). Additionally, it sold $4.8 million worth of shares on Nov. 1 and Nov. 2.

Another prominent fund, the ARK Fintech Innovation ETF (ARKF), also sold around 23,000 shares of DraftKings earlier in the month.

However, despite Wood’s decision to sell, Wall Street analysts remain optimistic about DraftKings’ future. Currently, 76% of analysts rate the shares as “Buy,” which is the highest buy ratio since it began trading in April 2020. The average price target for the stock stands at $40.03, suggesting a potential 3.5% upside based on Wednesday’s closing price.

The recent surge in DraftKings’ stock has been remarkable, with a 40% increase in November alone. This spike was sparked by the company’s strong third-quarter earnings, surpassing expectations. Notably, the sports betting app experienced a significant rise in its monthly paying customers, reaching 2.3 million, which signifies a remarkable 40% growth compared to the same period last year. Furthermore, DraftKings raised its revenue guidance for 2023.

While Wood’s actions may cause some unease, DraftKings’ stock still holds promise according to Wall Street analysts who remain bullish on the company’s performance.

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