Title: Founder of Barstool Sports, Dave Portnoy, Selling Penn Entertainment Shares Worth $30 Million
Subtitle: Penn Entertainment’s sale of Barstool allows focus on ESPN Bet, but at the cost of potential losses
Barstool Sports founder, Dave Portnoy, has announced the sale of 1.25 million shares of Penn Entertainment. These shares were obtained by Portnoy six months ago when the media brand was acquired by the casino company. With Penn shares currently trading at around $24, Portnoy is set to make an impressive $30 million from this transaction.
This is not Portnoy’s first profitable move. In 2016, he sold about 51% of Barstool to the Chernin Group, earning between $5 to $8 million. If Portnoy still owned 49% of Barstool when it was acquired by Penn Entertainment in 2020, he potentially missed out on another $230 million, resulting in a total potential payout of $270 million in stock and cash.
The sale of Barstool by Penn Entertainment is primarily driven by the company’s decision to shift its focus towards rebranding its sportsbooks under the ESPN Bet brand. However, this strategic move has not come without a cost. Penn Entertainment is estimated to have incurred losses as high as $850 million.
Interestingly, Portnoy’s behavior has attracted speculation as a possible factor in Penn Entertainment’s failure to obtain a gaming license in New York. The “Portnoy risk” has affected Penn shares on multiple occasions, triggered by reports of controversial behavior by both Portnoy and other Barstool staff members.
Although Portnoy is selling a significant portion of his Penn shares, he will still retain 226,800 shares as a result of a special set created for Barstool’s owners during the merger process. These remaining shares will ensure his continued involvement and influence within the company.
As Portnoy prepares to cash in on his shares, the sale of Barstool by Penn Entertainment presents an opportunity for the casino company to concentrate solely on transforming its sportsbooks into the ESPN Bet brand. Nonetheless, only time will tell whether this decision will prove to be successful or if it will result in further financial setbacks for Penn Entertainment.
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