Two days after PENN Entertainment Inc. PENN announced a full buyout of Barstool Sports, Barstool founder and CEO Dave Portnoy appeared on Fox Business to discuss the buyout and his take on meme stock trading.
Portnoy On Penn: On Friday, Portnoy said the first thing he plans to do with the money he's made in the Barstool buyout is move from New York to Florida to reduce his tax burden.
"I'm just going to live the same lifestyle I always have, except maybe more extravagantly," Portnoy said.
Portnoy, who adopted the moniker "Davey Day Trader" during the COVID-19 pandemic, also said he plans to invest some of his newfound wealth in the market.
"I still have crypto, I've got Bitcoin BTC/USD. I got back in at [$36,000], so I'm taking a beating there," he said. "But my net worth is still all tied into Penn… That's my investment. The other stuff is all fun and games."
Penn initially acquired a 36% minority ownership stake in Barstool back in January 2020, but the company announced on Wednesday it will be exercising its option to acquire 100% ownership of Barstool in February 2023.
Meme Stock Trading: Portnoy also criticized Chewy Inc. CHWY co-founder and GameStop Corp. GME chairman Ryan Cohen for dumping his shares of meme stock Bed Bath & Beyond Inc. BBBY after the stock skyrocketed more than 350% in less than a month.
"Anytime the little guy gets stuck holding the bag, you feel awful for them. And that's what happened in the whole meme stock movement when they stopped the trading," he said.
"When older investors lecture the newer investors on how they've got to take it seriously and the anti-meme stock [stuff], everybody's in it to make money and everyone is using every advantage they can," Portnoy said.
There's no difference between the targeted buying campaigns organized by Reddit's WallStreetBets community and the high-speed trading algorithms used by Wall Street investment banks and hedge funds, Portnoy said.
"This is just the world's biggest roulette wheel is what, basically, the stock market is," he added. "And people got mad when the retail investors got the hammer for once."
Benzinga's Take: Cohen really took the wind out of the entire meme stock trade on Friday. Bed, Bath & Beyond shares were down 40.9%, but GameStop traded lower by 7.5% and AMC Entertainment Holdings Inc. AMC was down 5.8% in sympathy.
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