Penn National shares surge a day after getting hammered by Dave Portnoy bombshell
Shares of Penn National Gaming bounced nearly 10 percent on Friday — a day after the gambling giant’s shares got hammered by reported accusations of sexual misconduct against Dave Portnoy.
Casino and racetrack owner Penn National — which also owns a 36-percent stake in Portnoy’s Barstool Sports website — saw its stock tumble 20 percent on Thursday after Business Insider detailed allegations from three young women including one who said she was suicidal after a sexual encounter with Portnoy.
One alleged victim, referred to as Madison, said, sex with Portnoy “was so rough I felt like I was being raped… He videotaped me and spit in my mouth and choked me so hard I couldn’t breathe.”
Portnoy has vehemently denied allegations of misconduct. In a lengthy Twitter video, Portnoy defended himself saying the accusations are part of a “hit piece” and “100 percent not true.”
Penn National shares on Friday were recently trading at $62.92, up 9.6 percent.
Penn National’s Thursday drop had shaved $2 billion off its market capitalization. A day later, bulls took to Twitter to defend the company’s business model amid the allegations.
“We are long $PENN. The sharp selloff from the @stoolpresidente article reflects a huge dislocation from actual biz fundamentals,” Prescience Point Capital Management wrote on Twitter Friday.
“It’s TBD how the Portnoy controversy will unfold & there’s no question @barstoolsports & @stoolpresidente are synonymous, but over the years Barstool has spiderwebbed into many verticals,” the hedge fund added.
Still, the company’s shares hadn’t recovered all their losses: They still are down more than 14 percent over the past five days even after Friday’s jump.
Penn’s shares had already taken a hit at the open after the company announced third quarter net income of $86.1 million — significantly below Wall Street estimates as well as the previous year’s net income of $141.2 million. Penn CEO Jay Snowden conceded “momentum slowed” during the quarter.
It’s not the first time controversy around Portnoy has dinged Penn shares. Earlier this year, Penn stock dipped 2.6 percent the day a sex tape of Portnoy leaked.
In addition to its minority stake in Barstool Sports, Penn works closely with Barstool on various products and merchandise. The companies plan to launch more digital content together, including a mobile app.