Genius Sports (NYSE:GENI) stock is extending a rebound born Thursday, as a well-known growing investor bought shares of the sports betting data provider, likely impulsive some of the Fri upside.
Cathie Wood’s ARK Investment Management bought 280,214 shares of Genius Sports on Aug. 5, scoring the fund issuer’s initial billet in the stock. That purchase was directed to the ARK Next Generation Internet ETF (NYSEARCA:ARKW) where Genius is currently the smallest holding in the $6.35 one thousand million exchange traded monetary fund (ETF) at weightiness of 0.08 percent, according to issuer data.
Genius rallied yesterday on word of a information share-out accordance with DraftKings (NASDAQ:DKNG). But there’s allay some contestation surrounding the name. On Thursday, forensic comptroller and noted shortsighted vendor Spruce Point Capital Management issued a vituperative describe on Genius, locution the inventory could tumble as a great deal as 80 percent.
In a written report titled Mr. Irrelevant… It Doesn’t Take A Genius, Ben Axler’s Spruce Point, which is unforesightful Genius stock, says the troupe potential overpaid for a data accord with the NFL, and that nearly a 3rd of bets placed aren’t hooked on the information provided by Genius and its competitors. That indicates the marketplace for the company’s services is potentially far littler than it’s letting on.
ARK Not Afraid of Controversy
It may just be happenstance that Wood’s steadfast stepped into Genius on the solar day the Spruce Point account was released. But ARK has a report for non beingness afraid of stocks that could live sources of controversy.
That’s especially confessedly of the fund manager’s gaming positions, which currently consist of Genius, DraftKings (NASDAQ:DKNG) and Skillz (NYSE:SKLZ) — all deuce-ace of which feature been assailed by myopic sellers at some spot this year.
ARK owned shares of DraftKings crosswise several of its ETFs in pass on of a bearish account past Paul Ludwig von Beneckendorff und von Hindenburg Research published inward June. Wood’s firmly added to its position inward the sportsbook manipulator following button of the Paul Ludwig von Beneckendorff und von Hindenburg note.
Though ARK lately modestly cut its spot inward Skillz, the money manager has been a persevering emptor of the wandering games platform manipulator this year, even defending it in the face of no more fewer than III shortsighted marketer reports.
What ARK Could See in Genius
Genius doesn’t run as a consumer-facing sportsbook. Rather, sportsbook operators buy data from the accompany and its rivals. It’s expected those purchases will step-up over clip as in-game wagering grows inwards popularity inward the US.
In other words, companies the likes of Genius are gumption or substructure plays on the maturation of regulated sports betting. For its part, ARK lastly month forecast a ten-fold increment inward domesticated sports betting handgrip to $180 billion past 2025, with revenue soaring at a 31 percent compound yearbook growth rank (CAGR).
For its part, Spruce Point calls Genius a “middleman” with an “inferior business sector model,” spell noting the gillyflower could follow vulnerable to substantial near-term headwinds as a lockup full point expires this month, permitting insiders to sell shares.