Investor Einhorn Boosts Penn Entertainment Shares Amid Board Dispute
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Published on: May 15, 2025, 5:30pm
Last updated on: May 15, 2025, 5:30pm
By: Todd Shriber, ETFGodfather | Gambling Industry Insights | Investments | Mergers and Acquisitions
DME Capital boosts its stake in Penn Entertainment amid proxy war
In a tense corporate showdown, DME Capital Management bumped up its shares in Penn Entertainment (NASDAQ: PENN) this quarter, while another hedge fund braced for a proxy battle against the regional casino operator. As the drama between Penn and HG Vora unfolds, the gaming company's shareholders are left guessing about DME Capital's stance on the issue.
Filings with the Securities and Exchange Commission reveal that DME Capital's investment in Penn swelled from approximately 5.75 million shares in the final quarter of 2024 to around 6.27 million shares during the first three months of 2025. The hedge fund, formerly known as Greenlight Capital, purchased its initial shares of Penn in the first quarter of 2024. This move marks at least the second time DME Capital has fortified its position in the gaming company.
For Penn, DME Capital is the sole gaming stock in its investment portfolio, one of only a few additions the firm made in the first quarter. Known for its nimbleness in the gaming equity market, DME regularly takes on both bullish and bearish positions in the industry[3].
Timing Tussle between Einhorn and Penn-Vora
Hours before the SEC filing was released in the US markets' closing bell, Penn Entertainment's board sent a letter to its investors, laying down accusations against HG Vora. The board claimed Vora had allegedly disregarded state gaming laws in a bid to clinch three board seats. The directors further asserted that Vora sought to engineer a significant debt-funded buyback plan, which could have raised eyebrows due to potential legal violations[4].
The Vora-Penn dispute, still in the limelight, may hit a boiling point at the gaming company's annual gathering next month, where shareholders will decide between Penn's proposed board slate and the "Gold Card" option, championed by Vora[1]. However, DME Capital's position on the matter remains unclear; the firm has yet to voice its thoughts on how it plans to vote or its overall opinion on the controversy[2].
Casino.org reached out to DME for a statement, including a query regarding their voting intentions at the upcoming meeting, but there has been no response as of this writing. The average price DME paid for its Penn shares dropped as the firm bolstered its position amid the stock's descent. The initial average price was $22.69, but it may have dropped significantly following the addition to the position, as the stock closed at $15.81 today.
Other 13F Highlights in Gaming
In other 13F developments, Stanley Druckenmiller's Duquesne Family Office significantly increased its stake in FanDuel parent Flutter Entertainment (NYSE: FLUT) to nearly 377,000 shares from just 18,100 in the previous quarter. Elsewhere, 3G Capital lightened its position in DraftKings (NASDAQ: DKNG)[5].
Politics also made waves in today's 13F updates, with Soros Fund Management signaling its entry into the Las Vegas Sands (NYSE: LVS) portfolio in the first quarter. The Soroses,et al., are longtime, significant contributors to the Democratic Party and its candidates, while LVS's biggest individual investor, Dr. Miriam Adelson, has been a regular donor to the Republican Party and President Trump[6].
References:
[1] Penn Entertainment Annual Meeting of Shareholders[2] Penn Entertainment and HG Vora proxy battle updates[3] DME Capital's investment strategies[4] Penn Entertainment's letter to shareholders[5] DME Capital's portfolio[6] Soros Fund Management's new position in LVS
- The financial industry, including poker, banking-and-insurance, and fintech sectors, might witness significant changes due to the increasing interest of famous players, such as DME Capital, in the gaming industry.
- It is intriguing to see DME Capital's continued investing in Penn Entertainment, particularly amid the ongoing proxy war with hedge fund HG Vora, and it raises questions about their stance on the issue.
- The real-estate and stock-market sectors could see shifts in investment patterns as DME Capital's gaming-focused strategies extend to other sectors, drawing attention and potential imitation from other investors.
- The incremental involvement of influential figures like DME Capital in the gaming industry's financial landscape highlights the potential for growth and attractive opportunities in the sector for investors.
- The intersection of gaming, finance, and investing could yield interesting developments as more influences, whether individuals or institutions, become involved in the rapidly changing landscape of the gambling industry.
