Penn Entertainment Stock Soars as Activist Investor Calls for a Sale
:max_bytes(150000):strip_icc():format(jpeg)/INV_PennEntertainmentLogo_GettyImages-1245596475-ac22e75f73994b78966bd1fb43d7cf71.jpg)
Rafael Henrique / SOPA Images / LightRocket via Getty Images
Key TakeawaysActivist investor Donerail Group called on Penn Entertainment's board to sell the casino, online gaming, and racetrack operator.Donerail Managing Partner Will Wyatt wrote to the board on Friday, criticizing members for bad deals and for overpaying CEO Jay Snowden, allegedly hurting shareholder value.Wyatt said Penn Entertainment could be worth $5.9 billion to $6.9 billion.
Penn Entertainment (PENN) shares soared over 18% in intraday trading Friday after an advisory firm and activist investor said the operator of casinos, online gaming, and racetracks should look for a sale.Donerail Group Managing Partner Will Wyatt wrote the company's board of directors, and said members were “riverboat gamblers,” whose misguided interactive strategy and poor capital allocation management have “destroyed shareholder value.” Penn Criticized for Buying Barstool SportsWyatt pointed to a string of failed online gaming deals, particularly the purchase of Barstool Sports in 2020, which Penn eventually sold back to its founder for $1, amounting to a loss of almost $1 billion, according to the activist investor.In addition, Wyatt blasted what he called the “excessive compensation” for CEO Jay Snowden “despite extremely poor performance.” Wyatt argued Penn’s stock price is “significantly below the intrinsic value of the Company,” and that its casino assets alone could be worth more than double the firm’s current market capitalization. He put a potential price tag on Penn of between $5.9 billion and $6.9 billion. Penn Stock Surges After Activist LetterWyatt added ”how can the Board continue to argue the benefits of operating as a standalone entity, which has thus far amounted to an overly risky and highly unprofitable gamble, in the face of what would likely be robust strategic appetite that could yield significant upside for investors?”Penn Entertainment representatives didn't immediately respond to a request for comment on Friday.Shares of Penn Entertainment were 18.7% higher at $17.36 as of 3:35 p.m. ET Friday. However, even with Friday's advance, they’ve lost about one-third of their value in 2024.
TradingView
Read the original article on Investopedia.
Welcome to Billionaire Club Co LLC, your gateway to a brand-new social media experience! Sign up today and dive into over 10,000 fresh daily articles and videos curated just for your enjoyment. Enjoy the ad free experience, unlimited content interactions, and get that coveted blue check verification—all for just $1 a month!
Account Frozen
Your account is frozen. You can still view content but cannot interact with it.
Please go to your settings to update your account status.
Open Profile Settings