Dave Portnoy attends the 2020 Pegasus World Cup Championship Invitational Series at Gulfstream Park on January 25, 2020 in Hallandale, Florida.
Paul Morigi/Getty Images for The Stronach Group
Penn National Gaming, which owns a 36% stake in Barstool Sports, fell 21% on Thursday.
The stock fell after the company reported weak third-quarter earnings Thursday morning.
It continued to decline after Insider published allegations against Barstool founder, Dave Portnoy.
Penn National Gaming Inc. fell 21% on Thursday after the company fell short of earnings expectations and Insider published sexual misconduct allegations against Dave Portnoy.
Penn, which operates casinos and racetracks, owns a 36% stake in Barstool Sports, a massive digital media brand founded by Portnoy. Penn is using the Barstool brand to launch online and retail sports betting operations and sports bars around the country.
Penn reported third-quarter earnings early Thursday morning, after which its stock fell sharply from its Wednesday close of $72.73 to $65.67 by 10:45 a.m. ET, when Insider published it’s story on Portnoy.
Three women, whose identities are known to Insider, said they had engaged in violent consensual sex with Portnoy that “turned into frightening and humiliating experiences that have taken a toll on their mental health,” Insider reported. Two of the women said he choked them and filmed the encounters without their consent.
Portnoy has denied the allegations, with his attorney telling Insider in an email the women’s claims “embody half-truths, are highly misleading, lack appropriate context, and appear to have been provided to you by individuals whose motivations and trustworthiness should at least have been fully vetted.”
Portnoy also denied the allegations in videos shared on Twitter, calling the encounters described in the story as consensual.
After Insider published the report, Penn stock continued to decline, closing out the day at $57.40, the lowest it’s been in over a year.
Penn did not immediately respond to Insider’s request for comment.
Barstool Sports founder Dave Portnoy visits the Nasdaq on February 27, 2020 after Penn National Gaming purchased a stake in the media company valuing it at $450 million.
Barstool Sports
Penn National Gaming jumped to an all-time high of $142 ahead of its inclusion in the S&P 500 next week.
The Barstool Sports stakeholder has rallied over 20% in the last five days.
Barstool founder Dave Portnoy tweeted “a lot of people” have told him he’s now “the king of the S&P 500.”
Penn National Gaming jumped to an all time-high of $142 a share on Monday, recording a 31% gain since the stock’s closing price on March 5 as investors cheered its inclusion in the S&P 500.
On Friday S&P Dow Jones Indices announced it will add Penn National Gaming into the S&P 500 benchmark index on March 22. Penn was previously in the S&P 400 MidCap index.
The company acquired a 36% stake in Barstool sports in January 2020, and Barstool founder Dave Portnoy says he owns “a ton of Penn Stock,” in his twitter bio.
“They tell me the S&P 500 are the 500 most American, most dominant, most influential, most spectacular companies in the universe,” Portnoy said in a video he tweeted Monday morning. “I am now- a lot of people saying, their words not mine-the king of the S&P 500, hence, the king of America.”
Penn has gained almost 3,000% since its intraday low of $3.75 on March 18 at the onset of the coronavirus pandemic. It’s a sign that investors are betting big on the rebound of sports betting and casinos. Casino company peer Caesars Entertainment is also being added to the S&P 500, along with Generac Holdings, a power generator manufacturer.
Penn, Generac Holdings, and Caesars Entertainment will replace SL Green Realty , Xerox Holdings, and Vontier, which will move to the S&P MidCap 400.
Shares of Penn National Gaming pared gains after the Monday morning spike and are currently hovering around $134.
Robinhood users are coming for the trading app’s head.
Robinhood stopped allowing users to buy GameStop on Thursday morning, only allowing users to sell, following a weeks of huge gains – from being below $5 in late 2020 to over $450 per share on Thursday morning.
Users of the Reddit forum r/WallStreetBets encouraged each other to bid up GameStop’s stock price, thus causing a short squeeze on the hedge funds betting against GameStop’s stock value. As a result, those short-sellers lost more than $1 billion in a single day while the company’s stock value shot up by hundreds of dollars per share.
On Thursday morning, citing “significant market volatility,” Robinhood cut off users from trading GameStop stock (and a handful of other companies).
That decision caused a massive outcry on social media.
“Robinhood has disabled trading in $AMC $GME $NOK etc, proving that the ‘little guy’ was never allowed to win in a ‘free market’,” popular newsletter writer Joe Pompliano said in a tweet. “What a joke.”
The Robinhood app listing received an influx of one star reviews on the Google Play store, causing the app to average the lowest rating.
Robinhood received an influx of one star reviews on the Google Play store.
Allana Akhtar/Business Insider
And members of r/WallStreetBets threatened to file a class action lawsuit against Robinhood for market manipulation.
“Allowing people to only sell is the definition of market manipulation,” one post on r/WallStreetBets read. “A class action must be started, Robinhood has made plenty of money off selling info about our trades to the hedge funds to be able to pay out a little for causing people to lose money now.”
Robinhood, founded in 2013 by Stanford graduates Baiju Bhatt and Vladimir Tenev, allows users to trade stocks without commission. “We’re proud to have created a platform that has helped everyday people, from all backgrounds, shape their financial futures and invest for the long term,” the firm said in a blog post.
Instead of taking commissions on stock trades, the company says it earns revenue through a variety of other means, from financial services to a membership program (“Robinhood Gold”).
Users aren’t the only ones criticizing Robinhood publicly.
Billionaire Mark Cuban questioned why Robinhood restricted trading, tweeting: “So are @robinhoodapp and @IBKR ending trading in #wallstreetbets stocks because they are losing their a** on these trades? Or maybe they don’t have the cash to enable the trades at this scale? Anyone have any insight on their economics?”
Barstool Sports, along with the blog’s founder Dave Portnoy, declared “war” on Robinhood.
“You are scam artists,” Portnoy tweeted in response to Robinhood’s announcement on restricting trading. “You are crooks. You deserve to be behind bars and you know it.”
Rep. Alexandria Ocasio-Cortez called Robinhood’s action “unacceptable,” and called for “a hearing if necessary” to determine why the company chose to “block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.”
Sen. Ted Cruz seconded Ocasio-Cortez’s tweet. “Fully agree,” he said.
Detroit-based CEO and philanthropist Bill Pulte weighed in as well.
“This is what you call rich people trying to confuse you with fancy words,” he tweeted in response to Robinhood’s statement on why it’s restricting stock trades of GameStop.
Robinhood representatives didn’t immediately respond to a request for comment.
