{"id":321367,"date":"2024-05-31T15:53:28","date_gmt":"2024-05-31T20:53:28","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=321367"},"modified":"2024-05-31T15:53:28","modified_gmt":"2024-05-31T20:53:28","slug":"penn-investor-pushes-for-sale-says-snowden-is-overpaid","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/","title":{"rendered":"Penn Entertainment Failing in Sports Betting, Should Consider Sale, Says Investor"},"content":{"rendered":"

In a letter to Penn Entertainment\u2019s (NASDAQ: PENN) board of directors, the Donerail Group, which has long been an investor in the regional casino operator, said the gaming company is failing in online sports betting, is overcompensating CEO Jay Snowden, and should consider a sale to create shareholder value.<\/p>\n

\"PENN
An image for Penn Entertainment. Investor Donerail Group said CEO Jay Snowden is overpaid and Penn should consider selling itself. (Image: Penn Entertainment)<\/figcaption><\/figure>\n

Donerail Managing Partner Will Wyatt opined in the letter to Penn Chairman David Handler that the gaming company has spent four years and billions of dollars of shareholder capital in a bid to gain a foothold in the online sports betting space, but those efforts have proven unsuccessful.<\/p>\n

Moreover, the growing pattern of guidance misses, alongside a demonstrated unyielding appetite to continue to invest in the Company\u2019s fledgling Interactive projects, irrespective of past results and without a clear return framework, has significantly damaged the credibility of this management team and Board of Directors,\u201d wrote Wyatt.<\/p><\/blockquote>\n

There\u2019s something to those claims. Between January 2020 and February 2023, Penn shelled out about $551 million to acquire Barstool Sports<\/em><\/a> in an effort to leverage that brand as a catalyst for its online and retail sportsbooks, but those dividends never accrued.<\/p>\n

Last August, the regional casino giant sold Barstool<\/em> back to founder David Portnoy for just $1 as it entered into a costly agreement with Walt Disney (NYSE: DIS) to use ESPN <\/em>branding for the Penn-operated ESPN Bet mobile betting app. In addition to paying ESPN<\/em> $1.5 billion over 10 years<\/a>, the gaming company also granted the network $500 million in equity warrants. While ESPN Bet has performed better than Barstool Sportsbook, Penn has made little headway in terms of wresting market share from larger rivals DraftKings and FanDuel.<\/p>\n

Penn Entertainment Sale Makes Sense, Says Donerail<\/h2>\n

The letter by Donerail, a Los Angeles-based, event-driven money manager, sparked a noteworthy rally by Penn shares with the stock closing high by 19.62% on volume that was more than quadruple the daily average. However, today\u2019s showing was a departure from the norm.<\/p>\n

\n

As Wyatt pointed out to Handler, Penn shares shed 80% over the past three years. Today, the stock closed at $17.50 — a far cry from the all-time of $142 set in March 2021. That lengthy slump coupled with the aforementioned board and management missteps are among the reasons Donerail believes Penn should consider selling itself — a move that if executed could fetch more than double the operator\u2019s current market value of $2.19 billion, according to Wyatt.<\/p>\n<\/div>\n

\u201cGiven our understanding of the Company\u2019s assets, however, alongside an understanding of the industry participants\u2019 current strategic appetite to grow inorganically, we do believe that a sale of the Company\u2019s assets, if undertaken, could generate meaningful and certain value creation for equity investors,\u201d he noted to Handler.<\/p>\n

In the letter, Wyatt observed that Penn\u2019s market capitalization represents a steep discount to the $13.35 billion average found among its peer group, but the Donerail partner didn\u2019t directly identify potential suitors for the gaming company.<\/strong><\/p>\n

In recent months, Penn has been the subject of attention by professional investors. Last month, David Einhorn\u2019s Greenlight Capital announced \u201cmedium sized\u201d stake in Penn. Last December, HG Vora said<\/a> it took an interest of 18.5% of Penn\u2019s shares outstanding and demanded board seats in an effort to push for change at the gaming company. Despite that fanfare, the stock shed almost a third of its value since the start of 2024.<\/p>\n

Donerail Decries Snowden Compensation<\/h2>\n

Wyatt didn\u2019t hold back in his criticism of Penn\u2019s compensation of CEO Jay Snowden, noting the board signed off on $99.3 million in total pay for the executive between 2020 and 2023 — a period that included significant declines by the stock.<\/p>\n

Citing Institutional Shareholder Services (ISS), Wyatt said Snowden has the worst possible score issued by the firm in terms of his compensation being aligned with shareholder interests.<\/p>\n

\u201cIn fact, Mr. Snowden\u2019s compensation was deemed to be so gratuitous, As You Sow chose to use PENN as a case-study of wrongdoing in its report. Institutional shareholders appear to share our view, with leading institutional investors BlackRock, Vanguard, State Street Global Advisors, and CalSTRS all having voted against PENN\u2019s executive compensation in the past, yet meaningful change has not been made by the Board\u2019s compensation committee,\u201d said Wyatt.<\/strong><\/p>\n

As You Sow, a leading shareholder advisory group, recently noted that Snowden was the third-most overpaid CEO among S&P 500 companies, but the stock was removed that index<\/a> in September 2022.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a letter to Penn Entertainment\u2019s (NASDAQ: PENN) board of directors, the Donerail Group, which has long been an investor in the regional casino operator, said the gaming company is failing in online sports betting, is overcompensating CEO Jay Snowden, and should consider a sale to create shareholder value. Donerail Managing Partner Will Wyatt opined […]<\/p>\n","protected":false},"author":46,"featured_media":270212,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,32093,1074],"tags":[81897,81903,81966,80968],"acf":[],"yoast_head":"\nPenn Investor Pushes For Sale, Says Snowden Is Overpaid<\/title>\n<meta name=\"description\" content=\"Penn Entertainment Failing in Sports Betting, Should Consider Sale, Says Investor.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Penn Investor Pushes For Sale, Says Snowden Is Overpaid\" \/>\n<meta property=\"og:description\" content=\"Penn Entertainment Failing in Sports Betting, Should Consider Sale, Says Investor.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-05-31T20:53:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/04\/PP2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"627\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/\",\"url\":\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/\",\"name\":\"Penn Investor Pushes For Sale, Says Snowden Is Overpaid\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/04\/PP2.jpg\",\"datePublished\":\"2024-05-31T20:53:28+00:00\",\"dateModified\":\"2024-05-31T20:53:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Penn Entertainment Failing in Sports Betting, Should Consider Sale, Says Investor.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/penn-investor-pushes-for-sale-says-snowden-is-overpaid\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/04\/PP2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/04\/PP2.jpg\",\"width\":1200,\"height\":627,\"caption\":\"An image for Penn Entertainment. Investor Donerail Group said CEO Jay Snowden is overpaid and Penn should consider selling itself. 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