DraftKings finds buyers in Cathie Wood’s ARK

Cathie Wood and buy-the-dip retail traders are snapping up shares of DraftKings Inc. and boosting the stock after it got hammered this week over its move to buy U.K. gambling company Entain Plc.

Wood’s Ark Investment Management bought roughly 770,000 shares of Boston-based DraftKings on Wednesday across two exchange-traded funds, according to a trading update. Those buys follow a rush of retail investors who snatched up $44 million worth of shares on Tuesday and added another $11 million Wednesday, according to Vanda Research.

DraftKings shares surged as much as 2.3% out of the gate Thursday, and despite a bit of a fade they’re still on pace to snap a three-day losing streak that wiped out $3.1 billion in market value in a decline of more than 12%. Investors appeared to shrug off a Hedgeye report that added the company to its list of short-selling ideas and said there was potential for as much as 25% downside from current prices.

The buying offers Wood’s stamp of approval while continuing a theme of small investors taking advantage of selloffs in individual stocks and the broader market to add to their positions. While Wall Street debated the outlook for DraftKings’ Entain bid and how it could affect the U.K. company’s MGM Resorts International joint-venture, retail money continued to buy the weakness.

Cathie Wood’s impact on stocks, and in particular on amateur investors, has been evident since the onset of the pandemic. Her actively managed ETFs have been among the top performers over the past few years, with her flagship Ark Innovation ETF amassing more than $21 billion in assets.