Dave Portnoy's Stake In PENN Loses Value Amid Controversy

Barstool Sports founder Dave Portnoy is facing allegations of sexual violence. Will he hold his stake in Penn National Gaming as PENN shares plummet?

Rachel Curry - Author

Nov. 5 2021, Published 11:02 a.m. ET

Amid allegations of sexual violence against women, Barstool Sports founder Dave Portnoy's wealth is coming into question. After all, he achieved that wealth using a platform centered on controversial hot takes, sexism, and racism. Some of his money comes from his stake in Penn National Gaming (NASDAQ:PENN), Barstool's key investor.

Article continues below advertisement
Article continues below advertisement

Portnoy denies the allegations against him, but PENN stock is still plummeting. How much equity does Portnoy have in Penn National Gaming, and will the parent company maintain ownership of its fighting subsidiary?

Why Penn National Gaming stock is dropping

PENN stock fell as much as 21.4 percent practically overnight. The drop occurred when Business Insider reported that a sex tape had leaked showing Portnoy violently choking a woman who was wearing a collar and leash.

Article continues below advertisement

This isn't the first time Portnoy has put his violent personality on display. He has publicly sympathized with rapists and sexual assaulters, including Harvey Weinstein. However, the latest divulgences of Portnoy's behavior are enough to cause a chunk of PENN shareholders to run. The stock's fall also coincides with an earnings call in which Penn missed the profit mark.

PENN stock's latest bout of volatility is big, but it's nothing compared to the company's fluctuations over the last year. The stock doubled in the five months ended in March, but subsequently lost that gain. As of Nov. 2021, PENN had fallen 5.6 percent in the last 12 months.

Article continues below advertisement
Article continues below advertisement

Dave Portnoy's overall net worth

Portnoy is estimated to have a $100 million net worth, though that metric could be lower considering PENN's recent volatility. As the founder of one of Penn's companies, he has some of his wealth tied up in his equity.

Dave Portnoy's PENN shares: What's at stake?

Penn, a casino operator, purchased Barstool in Jan. 2020 for $163 million, getting a 36 percent stake of the media company. The deal valued Barstool's entire operation at about $450 million. As of April 2021, Penn was planning to increase its stake in Barstool to 50 percent, though that transition has not yet come. It's unclear whether Penn will continue to increase its ownership in Barstool as Portnoy's dangerous behavior becomes harder to ignore.

Article continues below advertisement

Whatever the case, Portnoy himself has admitted to owning "a ton of Penn stock." He said he acquired the equity during the deal, a fact he vocalized when the stock was thriving at the end of 2020.

Article continues below advertisement

We don't know the precise size of Portnoy's stake, but we can say one thing. Since Jan. 2020 when Portnoy acquired his position, PENN stock has increased about 187 percent. The recent plummet has only deteriorated growth from the last year, and long-term growth is still in Portnoy's pocket.

Article continues below advertisement

Meanwhile, Portnoy's Social Sentiment ETF (BUZZ) has risen 14.15 percent since its inception in March. The allegations against Portnoy are serious, and Barstool's and Penn's future is at stake. So is Portnoy's position in publicly traded PENN stock.

Portnoy is a risk-taking investor

Known for sports betting, gambling, and day trading, Portnoy has admitted to using millions to day trade. Day trading is proven to be much riskier than swing-term or long-term trading. In the GameStop short squeeze, Portnoy admitted to losing about $700,000. If anything, his net worth is at risk from his buy first, think later investing strategy.


Latest Penn National Gaming Inc News and Updates

    Opt-out of personalized ads

    © Copyright 2024 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.