Einhorn Boosts Penn Entertainment Stake in Big Way

Posted on: August 14, 2025, 12:34h. 

Last updated on: August 14, 2025, 01:39h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Hedge fund manager significantly increased stake in casino stock in Q2
  • Move comes after firm boosted Penn position in Q1

For the second consecutive quarter, David Einhorn’s DME Capital Management increased its stake in regional casino operator Penn Entertainment (NASDAQ: PENN).

Hedge fund manager David Einhorn. His firm added to its Penn Entertainment stake in Q2. (Image: Institutional Investor)

A new Form 13F filing with the Securities and Exchange Commission (SEC) indicates that in the second quarter, the hedge fund lifted its position in the gaming stock to approximately 7.5 million shares from about 6.3 million in the first three months of the year.

Penn, the only gaming stock currently found in the DME Capital portfolio, was one of two names to which the money manager added to previously existing positions during the April through June period. It was a prescient move by Einhorn as shares of Penn are higher by 11% over the past 90 days.

The hedge fund initiated two positions in the second quarter while eliminating another pair. It also reduced its exposure to Peloton Interactive (NASDAQ: PTON). The Form 13 doesn’t include commentary on why money managers add to, eliminate, or reduce specific investments.

Einhorn Didn’t Shy Away from Penn Controversy

Formerly known as Greenlight Capital, DME Capital initiated its position in Penn in the first quarter of 2024. The recent addition to that stake marks at least the third time it’s been upped since DME got involved with the stock early last year.

Interestingly, DME upping its Penn investment in the June quarter came as the casino operator was locked in a proxy battle with activist hedge fund HG Vora. Vora pushed to have three directors added to Penn’s board. The gaming company added Johnny Hartnett and Carlos Ruisanchez, but objected to the addition of William Clifford, who has preexisting ties to Penn.

There’s still legal maneuvering taking place regarding Clifford’s candidacy, with Vora noting he received ample support from Penn investors at the operator’s June shareholder meeting. For now, the intensity between Penn and Vora appears to have cooled off.

Earlier this year, Casino.org reached out to DME Capital for comment on the Penn/Vora situation, but the hedge fund didn’t respond to that request.

Penn Stock Could Have More Upside

It’s unclear as to why Einhorn’s hedge fund boosted its Penn investment in the second quarter, but Wall Street is warming to the stock. The recent debut of a land-based casino in Joliet, Ill., and the early 2026 launch of the revamped Aurora, Ill., property are seen as catalysts for Penn at a time when Illinois gaming revenue is rising.

While Penn’s ESPN Bet unit often commands most of the attention, even overshadowing its regional casinos, analysts see pathways to earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) growth on the back of new projects.

“We believe a ‘normal’ ramp throughout the quarter should allow for an easier setup in 4Q25 for the overall enterprise,” wrote Citizens Equity Research Analyst Jordan Bender in a new report. “Easy comps (no new supply) position the company as one of the more favorable regional gaming companies in the space, in our view, and while online losses subside, we believe PENN’s lease-adjusted leverage will decline to 5.3x by YE26, from 7.0x in 2Q25.”