Financial

Druckenmiller Dumps DraftKings, Boosts Penn National Stake

Stanley Druckenmiller’s Duquesne Family Office was active with gaming equities in the third quarter. That includes a sizable addition to a previously existing position in Penn National Gaming (NASDAQ: PENN).

Billionaire investor Stanley Druckenmiller in a recent CNBC interview. His Duquesne Family Office recently added to its Penn National Gaming position. (Image: CNBC)

During the July through September time frame, the investment vehicle, which has 61 equity holdings valued at north of $3.4 billion, added 13 fresh positions. They did so while boosting stakes in 18 others, one of which was Penn National. The regional casino company is the only gaming name among the family office’s increased or new exposures.

As of Sept. 30, the family office owns 1.89 million Penn shares, an increase of nearly 81 percent from the second quarter. The operator of casinos under the Argosy and Hollywood brands, among others, now accounts for 3.99 percent of Druckenmiller’s portfolio. Just six stocks, a group including Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN), command bigger chunks of the family office’s roster of equity holdings than Penn National.

Like many investors this year, Druckenmiller is making money with the regional gaming company. The investment firm is up 32.3 percent from its average price paid for Penn stock, according to Guru Focus data. After tumbling below $4 during the initial wave of coronavirus cases, Penn has since rallied an astounding 1,623.73 percent.

A Form 13F filing with the Securities and Exchange Commission (SEC) released today confirms the upped Penn stake.

Loving Penn, Dumping DraftKings

Druckenmiller, whose net worth is an estimated $4.4 billion, is a native Pennsylvanian and cut his teeth at Pittsburgh National Bank in 1977. But it’s unlikely his affinity for the Keystone State is the motivation behind the Penn National investment.

What is clear is that the investor bailed on another gaming company with a rising Pennsylvania footprint: DraftKings (NASDAQ:DKNG). Duquesne eliminated its stake in the online sportsbook operator in the September quarter. That proved to be fortuitous, because at the start of the current quarter, DraftKings announced a massive secondary offering, along with news that some early investors were reducing exposure to the company.

Broadly speaking, Wall Street remains enthusiastic about DraftKings’ prospects, particularly against favorable political and regulatory backdrops. But Duquesne’s 13F confirms that stock is no longer part of the investment manager’s roster.

Leaving Las Vegas, Sort Of

In the third quarter, Duquesne reduced 13 of its equity holdings, including Las Vegas Sands (NYSE:LVS).

As of Sept. 30, the family office owned 3,635 shares of the Venetian operator, a position worth about $212,000 at today’s closing price. Duquesne’s time with LVS appears to be brief, because the money manager initially entered the stock in the second quarter. The 13F filing does not include details on why that exposure was pared.

Penn and Sands are currently the only gaming equities in the family office’s portfolio.

Todd Shriber

Gaming Financials, Casino Business----Todd Shriber got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long/short hedge fund, where he specialized in trading sector and international ETFs leading up to and during the financial crisis. Currently, he analyzes, researches, and writes on ETFs for a variety of Web-based publications and financial services firms. Shriber has been quoted in Barron's, CNBC.com, and The Wall Street Journal. His work has been published on sites such as Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He joined the Casino.org news writing team in 2019, and lives in Southern California, where he enjoys golf and taking his black lab to the dog park. When in Las Vegas, he likes to wager on college football, the NBA, three-card poker, and roulette, even though he knows better. Email: todd.shriber@casino.org

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Todd Shriber