One of the largest institutional investors in DraftKings (NASDAQ: DKNG) inventory rock-bottom its exposure to shares of the online sportsbook operator.

On Wednesday, Cathie Wood’s ARK Investment Management sold 207,747 shares of the gaming companionship as the carry cooled from a recent rallying — a stipulation that’s persisting today. Entering Thursday, the stockpile was higher by 6.16 over the yesteryear hebdomad — mostly the resultant of an supporting 2023 outlook delivered last week by the company.

Domestic equity markets retreated over the yesteryear brace of days amid expectations that the Federal Reserve might have got to follow to a greater extent fast-growing(a) than hoped regarding tighter pecuniary insurance this year. Rising interest group rates are drags on growing companies, such as DraftKings, because those elevated borrowing costs make believe the longer-dated immediate payment flows of development firms less appealing.

Rising rates are in particular onerous for companies that aren’t yet profitable, which is the example with DraftKings though the operator forecasted profitability in 2024.

Even with weakness in recent sessions, shares of DraftKings are higher by 65.74% year-to-date, indicating ARK had some runway with which to trimness its exposure to the carry at favorable prices.

ARK Still a Big DraftKings Backer

On Feb 22, Florida-based ARK Invest sold 178,593 shares of DraftKings from the ARK Innovation ETF (NYSEARCA: ARKK) – the firm’s flagship exchange-traded monetary fund (ETF). It also sold 29,154 shares of the gaming stock up come out of the ARK Next Generation Internet ETF (NYSEARCA: ARKW).

Those moves aren’t necessarily a pox upon the longer-ranging DraftKings investment. The mass of the ETFs in the ARK stable, including the aforementioned ARKK and ARKW, are actively managed. That agency holdings tin can modify on a daily basis. It’s also possible that Wood’s fast(a) pared its DraftKings bet to hike cash in for other opportunities.

ARK’s Midweek sales of DraftKings equity are small relation to the asset manager’s overall holdings of the sportsbook operator. At the ending of 2022, the ETF issuer owned 25.03 jillion shares of the gaming stock. Among fund issuers, only if Vanguard owned more. Overall, ARK is the third-largest institutional investor in DraftKings behind UBS and Vanguard.

It’s also worth noting that ARK has been a DraftKings supporter, and it’s not unusual for the truehearted to occasionally come down stakes inwards some of its favorite stocks.

ARK Bullish on Sports Wagering

In add-on to its ownership of DraftKings buy in and a far smaller situation inward sports betting data provider Genius Sports (NYSE: GENI), ARK Invest is broadly bullish on the long-term sports wagering investment funds thesis.

In the firm’s latterly published 2023 “Big Ideas,” ARK forecasts that online sports betting handle inward the US and Canada will jumping at a chemical compound annual development rate (CAGR) of 27% over the next Phoebe years.

ARK added it sees handle approaching $330 one thousand million inward 2027 — i of the most bullish forecasts inwards the investment funds direction industry.

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