DraftKings stock jumps after Ark Investments makes major purchase
Shares in US sports betting operator DraftKings soared this week as news broke that Ark Investment was adding the up-and-coming stock to its portfolio. Wall Street saw DraftKings’ shares spike ten percent on the news and Ark officials say they see nothing but an upside to sports betting and e-sports investing.
According to an official report from Ark investment Management, the company splurged on 602,300 shares of DraftKings valued at $33.9 million at the time of purchase. Of course the company saw an immediate gain as the purchase itself triggered a leap in DraftKings’ stock $59.21 by the end of the trading day on February 1 (the day of the purchase).
According to a report on CalvinAyre.com, the purchase was triggered by a report from Ark analyst Nicholas Grous. Grous sees nothing but profit with long-term holds on sports betting and e-sports stocks. That growth, he says, is the direct result of legalization of regulated sports betting in America.
“Since it legalized online sports betting in mid-2018, for example, New Jersey’s online handle has totaled $12 billion, half of which took place in 2020. Based on the $12 billion, we believe New Jersey has earned $100 million in taxes and enabled sports betting companies to generate $750 million in revenue. In the last two weeks, both New York and Texas have weighed in favorably on the prospective approval of online sports betting and, given their desperate need to plug gaping deficits, other states seem likely to follow,” he said.
Currently, sports betting is legal or about to be legal in more than half of all the US States, so DraftKings definitely has plenty of opportunity to prove Grous right.