Penn National Stock Drops with Portnoy COVID-19 Speculation
Posted on: August 19, 2020, 02:53h.
Last updated on: August 20, 2020, 08:35h.
Penn National Stock shares slid Wednesday after BarStool’s David Portnoy posted a video speculating that he might have coronavirus, underscoring just how intimately correlated the fortunes of Penn National Gaming (NASDAQ:PENN) stock is to the success of the company’s relationship with Barstool Sports.
The gaming company’s equity swung from an intraday flirtation with $57 to below $54, before settling at $54.73, down 1.17 percent on the day. That’s after the Barstool founder posted a video to Twitter saying he’s ill, that he hasn’t been out of bed in 40 hours, and that’s he eaten just a single apple during that time.
I’m just sick as a (expletive). I haven’t gotten out of bed in 40 hours,” said Portnoy. “Do I have COVID? I don’t know. Maybe. I’m going to fight its (expletive) just like I fight everybody’s (expletive).
— Dave Portnoy (@stoolpresidente) August 19, 2020
At the time Portnoy posted the video, he noted Penn stock was at $57. Recently, analysts have been fawning for the gaming company, citing strength among regional casinos, one of Penn’s operational fortes. They also tout the potential of the operator’s tie-up with Barstool in the rapidly growing domestic sports betting market.
In January, the Pennsylvania-based gaming entity paid $163 million in cash and equity to acquire 36 percent of Portnoy’s pop culture and sports media property. Penn can eventually own Barstool outright for $450 million.
Putting Things in Context
The decline in Penn stock Wednesday occurred on volume that was roughly five million shares below the daily average. That indicates selling intensity was kept in check despite Portnoy’s speculation about his health. Retrenchment in the name, albeit modest, isn’t unreasonable at this point, because the shares are up 52 percent over the past month and more than doubled over the past 90 days.
Conversely, selling in Penn with rumors of the Barstool founder’s fitness being the impetus is a reminder to investors that there’s something of a “Portnoy premium” baked into this stock. In a matter of months, the investment community has grown to view the brash mogul as the face of Penn, even though he holds no official leadership role at the company.
In a subsequent video, Portnoy sought to assuage his followers and, perhaps, Penn investors, by saying it will take more than the coronavirus – assuming he has it – to defeat him.
“It’s going to take the (expletive) National Guard to get me out of here,” he said. “Buy the dip if you want. (Expletive) it. I don’t care. I’m not going anywhere.”
If the recent price action in Penn is an accurate indicator, Wednesday’s weakness is likely to be brief. With the close at $54.73, the name still offers a decent upside to the high price target of $62 by two Wall Street analysts. Additionally, the shares reside well above the consensus forecast around $47, meaning other analysts could be compelled to ratchet up their projections.
It’s speculation at this juncture, but it will be interesting to see if Penn rallies on news of Portnoy coming back to health or that he doesn’t have COVID-19.
Related News Articles
Related News Articles
Bye Las Vegas Strip Buffets, Hello Food HallsMarch 6, 2023 — 20 Comments—
Long Island Residents Launch Petition Against Sands Casino PlanMarch 20, 2023 — 14 Comments—
VEGAS MYTHS BUSTED: You Don’t Have to Pay Resort FeesMarch 17, 2023 — 14 Comments—
U2 to Earn Unheard-Of Payday for Las Vegas Residency, Opening Date Set – ReportFebruary 16, 2023 — 10 Comments—
No comments yet