When PENN Entertainment PENN announced an agreement with The Walt Disney Company DIS that will see the launch of ESPN Bet in the fall, the sports betting company also announced it would be divesting the Barstool Sports business, turning the company back to its founder Dave Portnoy.
The transactions have raised several questions, and Portnoy quickly fired back at one claim Friday.
What Happened: As part of transactions by Penn Entertainment to acquire full control of Barstool Sports, the company paid cash and shares to Portnoy.
A SEC filing from Penn Entertainment on Friday listed 1,254,880 shares that were previously issued to Portnoy as part of the closing of the Barstool Sports transaction in February 2023.
“We have waived all contractual restrictions on transfer applicable to the shares of common stock covered by this prospectus supplement and agreed to file this prospectus supplement with respect to such shares. The shares of common stock being covered hereby may be sold or otherwise disposed of from time to time,” the filing reads.
The filing list a date of Aug. 18 for the sale to be completed. Otherwise the sales must be sold under Rule 144 under the Securities Act, which usually comes with pre-qualifying conditions on the timing of the sale and number of shares to be sold at a time.
“The selling shareholder is not obligated to, and there is no assurance that the selling shareholder will, sell all or any of the common stock we are registering.”
The filing lists 1,481,660 total shares owned by Portnoy, representing 1% of the company’s outstanding shares. The stake includes 1,254,800 shares that are available to sell and 226,800 shares that will still be owned by Portnoy if he were to sell the entire registered stake. The 226,800 shares are related to Series D preferred stock, according to the filing.
Related Link: Penn Entertainment Analysts On 'Landscape-Changing' Sports Betting Deal With ESPN: 'This Move Makes Sense'
Did Portnoy Sell Penn Stock?: News quickly circulated across social media Friday that Portnoy was “cashing out” of his Penn stock. A Sportico article reported that Portnoy had sold shares of Penn.
“According to a regulatory filing, the founder of Barstool Sports is selling 1.25 million shares of Penn he acquired six months ago as part of the casino company’s purchase of the media brand,” Sportico wrote.
The article in question went on to later clarify that the filing didn’t confirm that shares of Penn had been sold.
“Technically, the filing doesn’t mean Portnoy will sell all the shares listed in any particular timeframe, though typically such transactions occur in short order after the filing.”
Portnoy expressed his frustration with the report from Sportcio on Twitter, sharing that the “financial experts” weren’t “big brained.”
“When $PENN $DIS deal happened all my shares instantly vested per change of control. I still own them. I can just sell now if I wanted to. Read a book guys,” Portnoy tweeted.
Portnoy also shared two screenshots of tweets from Sportico, with one saying 1.25 million shares had been sold and another tweet saying that technically the shares hadn’t been sold yet.
“Dear Sportico you are stupid.”
In another tweet to a user, Portnoy said he “aint selling PENN at this price.”
“I think people are overreacting. I said it’s a win win and I believe that. People panicking in the streets and reacting to fake news. I think it’s on sale now.”
In his "emergency press conference" on Twitter announcing he was acquiring the Barstool Sports brand back, Portnoy praised Penn Entertainment and its CEO Jay Snowden.
“We wish them nothing but the best in their endeavors, it was truly a win-win.”
Portnoy said that Penn was able to land a great deal with the ESPN brand and said that it could be a great catalyst for the company.
“I still own a ton of PENN stock. I’ll probably hold it because I think it’s gonna go up.”
PENN Price Action: Penn Entertainment shares were trading down 6.49% at $23.50 midday Friday.
Photo by Zach Catanzareti Photo via Wikimedia.
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