Investor Einhorn Increases Stake in Penn Entertainment amid Board Dispute
Posted on: May 15, 2025, 05:30h.
Last updated on: May 16, 2025, 09:10h.
@etfgodfather, Todd Shriber Read More - Financial, Gaming Business, Mergers and Acquisitions
DME Capital boosts Penn stake as HG Vora faces heat, proxy war escalation
In the first quarter, David Einhorn's DME Capital Management pumped up its stake in Penn Entertainment (NASDAQ: PENN), with HG Vora, another hedge fund, stirring up trouble against the regional casino operator.
A form 13F filing with the Securities and Exchange Commission (SEC) reveals Einhorn's firm took its Penn position to around 6.27 million shares in Q1 2025, compared to about 5.75 million shares in Q4 2024. DME Capital had entered the Penn race in Q1 2024, making Penn its only gaming stock pick. With this move, it appears DME has beefed up its gambling portfolio yet again.
Thursday's 13F marks at least the second time DME has taken the plunge on the gaming company. The research indicates a pattern of investing in gaming equities, both in a long or short capacity.
Timing isn't everything, but...
The regulatory document arrived on the heels of a stern letter from Penn's board to investors, slamming HG Vora for dodging state gaming laws and pushing a debt-fueled buyback plan. The directors sent pointed allegations against the hedge fund and warned of significant financial engineering for such a move[1].
The Penn/Vora dispute is in full swing and could erupt at the gaming company's annual meeting next month, where shareholders will vote on the proposed slate of directors. Unlike the Quinn family, who sold their stakes in Penn Entertainment in Q1 2025, DME's decision not to flee the sinking ship hints at loyalty or confidence[2][3][4].
When asked for comment, DME Capital declined to elaborate on their stance regarding the matter, including their voting decision at the annual meeting.
In a smart move, Einhorn dumped cash into Penn shares at lower prices, pushing the company's average price down[5]. Its initial price was approximately $22.69, but it's likely below that figure now, with the stock closing at $15.81 on Thursday.
More 13F Goodies
Elsewhere in 13F news bombshells, Stanley Druckenmiller's Duquesne Family Office went all in on FanDuel parent Flutter Entertainment (NYSE: FLUT), hiking its stake to 377K shares from just 18,100 in Q4 2024[5]. Meanwhile, 3G Capital pulled back on its DraftKings (NASDAQ: DKNG) stake in the first three months[6]. There's also some juicy political news in the mix.
Soros Fund Management took the plunge on Las Vegas Sands (NYSE: LVS) in Q1 2025[6]. The investment adviser is closely tied with the Democratic party, while LVS' largest individual investor, Dr. Miriam Adelson, routinely backs the Republican party. The conflicting interests could add an extra layer of drama to the mix.
Famous poker players might be intrigued to know that financial juggernauts like DME Capital are not only interested in traditional business and finance but also investing in gaming companies, a notable example being Penn Entertainment. This move by DME can be considered a strategic move in the poker world, where knowing one's opponent's hand can be crucial. In a surprising turn, another financial player, Soros Fund Management, has also entered the gaming sector by investing in Las Vegas Sands, potentially adding a political dimension to their moves, given the investor's Democratic ties and the company's large individual investor who supports the Republican party. These financial decisions in the business of gaming could significantly reshape the landscape and lead to potential mergers and acquisitions, much like a high-stakes poker game.
