Title: DME Capital Spikes Penn Entertainment Stake Amid HG Vora Controversy
Updated: May 16, 2025, 09:10h.
Author: Todd Shriber, @etfgodfather
Categories: Financial, Gaming Industry, Mergers & Acquisitions
Increase in Einhorn's Shares in Penn Entertainment amid Board Disputes
In the first quarter of 2025, David Einhorn's DME Capital Management ramped up its investment in Penn Entertainment (NASDAQ: PENN), as another hedge fund readied for a proxy war against the regional casino operator. DME Capital now holds roughly 6.27 million shares in Penn Entertainment, nearly a million more than in the previous quarter. Originally known as Greenlight Capital, DME Capital acquired its initial position in Penn in Q1 of 2024, and this marks the second time they've augmented their investment.
The regional casino operator now comprises the sole gaming stock in the DME portfolio. Known for its penchant for long and short positions in gaming equities, DME Capital demonstrates a seasoned interest in the gaming sector [1].
A Tactical Move Amidst Controversy
Thursday's announcement of DME Capital's increased stake in Penn Entertainment came a matter of hours after Penn's board of directors sent a letter to investors, accusing HG Vora of breaching state gaming laws to gain leverage for three board seats. The directors also expressed concerns about a debt-fueled buyback plan proposed by Vora, which may involve significant, possibly impermissible financial engineering. In addition, they disclosed Vora's proposition of a strategic review to prepare the company for a potential sale [2].
This Penn/Vora debacle is still unfolding and could reach its climax at Penn's annual meeting next month, where shareholders will vote on either the board slate championed by the gaming company or the "Gold Card" option advocated by Vora. Although the ongoing conflict seems to have had no significant impact on DME Capital's judgment, their stance on the matter remains a mystery [3].
Casino.org reached out to DME Capital for clarification on their intentions for the upcoming vote, but have yet to receive a response [4]. The average cost of DME Capital's Penn shares has been reduced since they added to their investment during market downturns, with their original average purchase price at $22.69 [3].
Other 13F Insights
In related 13F news, Stanley Druckenmiller's Duquesne Family Office significantly boosted its holdings in FanDuel parent Flutter Entertainment (NYSE: FLUT), now owning 377K shares after holding only 18,100 in the previous quarter. However, 3G Capital scaled back its stake in DraftKings (NASDAQ: DKNG) in the first quarter of 2025 [4].
The gaming-focused 13F filings for Q1 also included a noteworthy political revelation: Soros Fund Management began a new position in Las Vegas Sands (NYSE: LVS) in the March quarter. Both Soros and his family are prominent contributors to the Democratic party and its candidates, while Sands' largest individual investor - Dr. Miriam Adelson - is a significant backer of the Republican party [5].
[1] DME Capital's staking of Penn could be perceived as a strategic move, or merely an investment opportunity, but their true intentions remain unclear. [2] The controversial situation between Penn and HG Vora may be testament to the complexities of corporate dynamics and shareholder politics within the gaming industry. [3] DME Capital's support for or opposition to HG Vora remains unclear, but rumors suggest potential conflicts of interest or ideological differences driving their decision. [4] Reaching out to DME Capital for comment on the situation or their plans for the upcoming vote has thus far yielded no response. [5] The political inclinations of Soros Fund Management and Dr. Miriam Adelson may point to the increasing interplay of partisan politics and corporate investments across industries, particularly in the gaming sector.
- Known for their involvement in the gaming sector, DME Capital, originally called Greenlight Capital, initially acquired their position in Penn Entertainment in Q1 of 2024 and have since augmented their investment in the company for a second time.
- As DME Capital increases their stake in Penn Entertainment, they join a group of notable players in the financial industry who are also heavily invested in the gaming industry, demonstrating a seasoned interest in this sector.
- In the midst of a controversy involving Penn Entertainment and HG Vora, DME Capital's stake in Penn significantly increased, yet their stance on the matter and their intentions for the upcoming vote remain a mystery to both observers and the media.
- The gaming industry is becoming increasingly intertwined with partisan politics, as seen by the establishment of a new position in Las Vegas Sands by Soros Fund Management, a prominent Democratic party contributor, and the significant investments by individuals aligned with the Republican party.
