How to Invest in Barstool Sports Even Though It's a Private Company
Barstool Sports isn't publicly traded, but Penn Entertainment, which trades under "PENN," holds a large stake in the company. Here's how to invest in Barstool Sports.
Aug. 19 2022, Updated 9:26 a.m. ET
Barstool Sports was founded by celebrity entrepreneur Dave Portnoy. The company features a blog focused on sports and pop culture as well as several other media ventures in the sports and gaming industry.
The company doesn't have stock that retail investors can buy outright since it isn't publicly traded at this time. However, someone who wants to own a piece of Barstool Sports could invest in the publicly traded company that holds a significant stake in Barstool Sports as of 2020.
What is Barstool Sports?
Barstool Sports has been around since Portnoy founded it in 2003. The platform includes a wide range of digital sports, entertainment, and media. About 100 shows are part of its regular lineup including Barstool Rundown, Pizza Reviews, Stool Streams, Barstool vs. America, and Barstool Finance.
The head of Barstool Sports is its CEO Erika Nardini. Forbes recently said, “Smart, determined and fearless, she is the visionary who has grown a small collection of misfit bloggers into a multi-faceted company with its hands in content, booze, gambling and much more.”
Dave Portnoy's Twitter suspension
Portnoy, the founder of Barstool Sports, has made a name for himself in the media. Earlier in 2021, he publicly criticized Robinhood founder Vlad Tenev. Portnoy told Tenev that by limiting trades during the GameStop frenzy, he helped big investors. Portnoy said, “That is the exact opposite of helping the little guy. You killed the little guy.”
In June 2021, Portnoy was suspended from the Twitter platform, where he has around 2.7 million followers. Twitter said that he violated the platform's rules and got a suspension. After a few hours and huge internet backlash with the trending hashtag #FreeDavePortnoy, the entrepreneur’s account was reinstated.
There was more controversy around the founder's name earlier in 2022. In late 2021, Business Insider published multiple stories about Portnoy being accused of sexual misconduct. In February, the Massachusetts native filed a defamation lawsuit against the website for the published stories.
Penn Entertainment now owns 100 percent of Barstool.
In early 2020, Penn Entertainment announced that it was going to acquire a 36 percent stake in Barstool Sports. At the time, the deal was worth $163 million. The breakdown of the transaction was $135 million in cash and $28 million in non-voting convertible preferred stock.
The deal included a "calls right," where Penn can exercise the option to purchase 100 percent of Barstool shares. On Aug. 17, Penn exercised that option and now is the sole owner of the sports media brand. Barstool has a valuation of about $450 million with the full acquisition.
Penn Entertainment is a publicly traded company listed on the Nasdaq Exchange under the ticker symbol "PENN." The transaction gave Penn exclusive gaming partnership rights along with the sole right to utilize the Barstool Sports brand for all of its online and retail sports betting and iCasino products.
According to Money Morning, online sports betting is expected to grow by 150 percent in the next decade, which makes Barstool Sports a good investment for Penn Entertainment. One of Barstool’s competitors is DraftKings.
You can invest in Barstool Sports indirectly.
Barstool Sports, on its own, isn’t a publicly traded firm. So, you can’t directly buy shares of Barstool on the NYSE or Nasdaq. However, if you’re interested in its business model and want to invest in the company indirectly, Penn Entertainment is on the stock market. Investors can buy shares of PENN via their regular brokerage. The Penn and Barstool deal is expected to close in early 2023.
