DKNG - PENN Entertainment registers shares that Dave Portnoy could sell in the future
2023-08-11 12:39:28 ET
PENN Entertainment ( NASDAQ: PENN ) disclosed on Friday that it registered just over 1.25M shares that could be sold by Dave Portnoy if he chooses. If the share offering was to be executed in full in the future, Portnoy would be down to a position of 226,800 shares.
The registration by Penn ( PENN ) of the shares covered by the new prospectus supplement does not mean that the selling shareholder will offer or sell any of the shares.
Earlier in the week, PENN Entertainment divested Barstool Sports to Portnoy, who founded the company in 2003 as a print publication. PENN sold 100% of the Barstool Sports common stock to David Portnoy in exchange for certain non-compete and other restrictive covenants. The casino operator also has the right to receive 50% of the gross proceeds received by David Portnoy in any subsequent sale or other monetization event of the Barstool media property.
The split between PENN and Portnoy has been amicable. Portnoy told his followers that he and PENN ( PENN ) underestimated how it would be to make the partnership operate in a regulated world. "We got denied [gambling] licenses because of me, you name it," he lamented. "So the regulated industry [is] probably not the best place for Barstool Sports and the type of content we make," he added.
Shares of PENN fell 7.05% on Friday and now traded below where they stood before the deal with ESPN was announced. Analysts have been generally cautious on the deal, although PENN is seeing having a better chance to compete with DraftKings ( DKNG ) and FanDuel ( OTCPK:PDYPY ). "While the sunk costs and value erosion from prior Interactive investments is a tough pill to swallow, the pivot to ESPN BET from Barstool likely provides the company with its best chance to reach critical scale and be a contender in the US digital gaming arena," noted CBRE Equity Research analyst John DeCree. Seeking Alpha analyst Scouting Stocks thinks PENN will be a strong overall sports betting competitor after about two years of EPSN Bet penetrating markets.
More on PENN Entertainment:
- Breakdowns on PENN from Seeking Alpha analysts
- Growth metrics on PENN
- Financial and valuation comparisons to sector peers
- Seeking Alpha Quant Rating on Penn
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PENN Entertainment registers shares that Dave Portnoy could sell in the future