Cathie Wood is busy trying to get back on track. Most of the exchange-traded funds held by Ark Invest — where she is the co-founder, CEO, and investment manager — are underwater in the otherwise buoyant 2024. It’s not stopping her from taking big bets on disruptive companies. If she’s right, being out of favor now is a temporary condition.
Wood publishes all of Ark’s daily transactions, so we know what she is buying and selling. I like to focus on what she’s picking up. Three of her more interesting purchases on Monday are DraftKings (NASDAQ: DKNG), Shopify (NYSE: SHOP), and Tempus AI (NASDAQ: TEM). She was adding to existing positions on all three stocks.
1. DraftKings
Shares of DraftKings more than tripled last year, but it’s been marching in place as growth slows and the online sportsbook market grows more competitive. After four straight years of top-line gains of 63% or better, revenue decelerated to just a 26% increase in its latest quarter.
Sports fans willing to put some money on the line know about DraftKings. It has 8.4 million unique users over the past 12 months, a 35% increase over the past year. The 3.1 million monthly unique payers it serviced in the second quarter, which it reported earlier this month, was a whopping 50% higher than its base of live sports gamblers a year earlier. Unfortunately, revenue rose a slightly weaker-than-expected 26%, partly because average revenue per monthly unique payer clocked in 15% lower than it did during the prior year’s second quarter.
It’s a different story on the bottom line, as DraftKings surprised the market by turning a profit. After back-to-back misses on the bottom line, it’s refreshing to get back to outsmarting analysts in terms of earnings projections. Analysts see DraftKings posting its first full-year profit in 2025.
Despite its well-known brand and a welcome slide in customer acquisition costs, there’s no denying that this is a cutthroat market. DraftKings announced this summer that it would be rolling out a gaming tax surcharge in four high-tax states with multiple mobile sports betting operators….
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