Penn National Becomes Hit Among Retail Investors as Portnoy Rankles Wall Street Establishment

Posted on: June 15, 2020, 04:00h. 

Last updated on: June 15, 2020, 10:45h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Since the March 23 market bottom, Penn National Gaming (NASDAQ:PENN) is the best-performing name in a basket of stocks constructed by Goldman Sachs. The collection tracks equities retail investors are growing fond of over the past several months.

Goldman Sachs Equities Tracker
Barstool Sports founder David Portnoy reportedly leads an “army” of day traders, some of whom are buying Penn National Gaming, which owns part of Barstool. (Image: Getty Images)

Shares of the regional gaming operator are up 184 percent from March 23 through June 11, a period in which Barstool Sports founder David Portnoy is becoming a pop culture phenomenon for his day trading antics, including both big losses and impressive gains. In January, Penn shelled out $163 million for a 36 percent stake in Barstool and can eventually acquire the sports media site outright for $450 million.

In the absence of US sports throughout much of the coronavirus pandemic, Portnoy took to day trading to keep eyeballs on Barstool, forming what he dubs “Davey Day Trader Global” or “DDTG.” However, he’s careful to warn his 1.5 million Twitter followers he’s not a financial expert.

I own a ton of Penn Stock. I’m not a financial advisor. Don’t trust anything I say about stocks. Owner of DDTG Global,” Portnoy says on his Twitter profile.

True to his entrepreneurial nature, the Barstool founder in May filed trademark applications for Davey Day Trader Global and DDTG.

A General? Maybe

With little to no scientific data to support the assertion, mainstream financial media conclude that the absence of US sports because of the pandemic is turning would-be bettors into an army of day traders, with Portnoy as their general.

On May 22, Barron’s ran this headline: “Day Trading Has Replaced Sports Betting as America’s Pastime. It Can’t Support the Stock Market Forever.” Fox Business chimed in on June 13 with the following: “Barstool’s Dave Portnoy leads army of new traders into stock market.” The June 13 print edition of the Financial Times features an article titled “Rise of the Retail Bro”, with three pictures of Portnoy tweets.

Portnoy may not be fond of the “general” title, but data suggest smaller investors are following his trades. The aforementioned collection of stocks tracked by Goldman Sachs that retail traders are accumulating includes four airlines and two cruise line operators – industries Portnoy made some winning trades on in recent weeks as the US economy reopened.

In early May, the Barstool founder took to Twitter to say, “I’m not saying I’m smarter than Warren Buffet…. but I probably am,” referencing famed investor Buffett’s poor timing in dumping airline equities in March as stock prices were plunging. Soon after it was revealed the Oracle of Omaha was out of airlines, Portnoy and some of his fans stepped into the stocks, turning tidy profits in the process.

Gaming Angles

In addition to Penn, the only other gaming company in the Goldman basket is MGM Resorts International (NYSE:MGM), which returned 95 percent from March 23 to June 11.

Portnoy occasionally posts videos of his trading activities, and he’s been spotted transacting in gaming names such as DraftKings (NASDAQ:DKNG) and GAN Ltd. (NASDAQ:GAN)

While he hasn’t been spied day trading Penn National stock, he’s quick to defend the company that’s vaulted his net worth into the nine-digit club.

As Casino.org reported last week, Deutsche Bank analyst Carlo Santarelli downgraded Penn to “sell” from “hold,” sparking a tirade from Portnoy in the process. In a Twitter post with Davey Day Trader Global splashed across the bottom corner of the post, Pornoy called Santarelli a “moron” while intentionally mispronouncing the analyst’s last name,among other unpleasantries.