Title: DME Capital Bolsters Penn Entertainment Stake in Q1 Amid Boardroom Drama
Published On: May 15, 2025, 05:30h
Hedge fund manager David Einhorn increases his stake in Penn Entertainment amid board disagreements
Last Updated On: May 16, 2025, 09:10h
Author: Todd Shriber (@etfgodfather)
Categories: Finance, Gaming Business, Mergers and Acquisitions
In a surprising turn of events, David Einhorn's DME Capital Management upped its game in Penn Entertainment (NASDAQ: PENN) during the first quarter of 2025, as another hedge fund geared up for a proxy war against the regional casino operator.
A hurriedly filed form 13F with the Securities and Exchange Commission (SEC) painted a picture of Einhorn's firm increasing its Penn shares to approximately 6.27 million from about 5.75 million shares in Q1 2025. DME Capital kicked off its Penn journey in Q1 2024, marking this the secondround of bolstering the gaming company's position.
Penn is standing solo in DME's gaming portfolio, with the hedge fund known for hitting it big on both long and short gaming equities.
Timing Conundrum
Penn's board of directors sent a letter loaded with allegations and fiery remarks to investors just hours after the regulatory document confirming DME Capital's additional Penn investment was released in the US market. In this letter, Penn's directors accused HG Vora of skirting state gaming laws to clinch three board seats, along with scheming for a debt-fueled buyback plan that could've necessitated complex financial engineering. They added that Vora proposed a strategic review to prepare Penn for a sale.
Although the Penn-Vora fracas didn't serve as a roadblock for DME Capital's equity boost, it's unclear how Einhorn feels about this fiasco. Casino.org reached out, but the response has been as tardy as a snail.
As of now, DME has trimmed its average price per share by beefing up the position amid stock price plunges. The initial average acquisition price was $22.69, but it's well under this figure currently, given the stock closed at $15.81 on Thursday.
Other 13F Happenings
Several other gaming stocks found themselves in the limelight due to 13F moves. Stanley Druckenmiller's Duquesne Family Office noticeably upped its stake in FanDuel parent Flutter Entertainment (NYSE: FLUT) to 377K shares in Q1 2025 from just 18,100 in Q4 2024.
Adding an intriguing political flavor to the 13F filings, Soros Fund Management started a fresh position in Las Vegas Sands (NYSE: LVS) in Q1. George Soros and his family, prominent Democratic party supporters, and Dr. Miriam Adelson, one of President Trump's significant benefactors and a Republican heavyweight donor, mark the film's leading players in this high-stakes dance.
[1] Enrichment: While DME Capital's increases its stake in Penn Entertainment during the first quarter of 2025, it is not deterred by the ongoing controversy surrounding the company's board and CEO. However, the company has not publicly declared its stance on the corporate governance issues or how it will vote at the upcoming shareholder meeting.
[2] Enrichment: Despite this, DME Capital's strategic move to increase its investment in Penn Entertainment in the midst of the board and CEO controversy has contrasted with the more adversarial stances of other investors involved in the saga.
- Famous poker player David Einhorn's DME Capital Management, known for its profitable investments in gaming equities, increased its investment in Penn Entertainment, a move that occurred during a heated period of boardroom drama.
- In a surprising twist in the ongoing Penn Entertainment saga, renowned investors such as DME Capital Management continue to show faith in the company, while details about the specific sentiments or voting strategies of these investors remain unclear.
- Unlike some other notable investors in the gaming industry who have been more overtly adversarial, DME Capital's recent strategic move to boost its financial stake in Penn Entertainment seems to hint at a more complex approach to the company's ongoing corporate governance issues.
