Barstool Sports & Penn National Gaming Deal Leads To A Rush of Robinhood Buyers
Over 27,000 accounts now own Penn stock, up from 1,000 days earlier.
Last week you might have seen this story; Penn National Gaming, owners of 40+ regional casinos and sportsbook, sunk $163 million for a 36% stake ($135M in cash, $28M in preferred stock), with the option to buy an additional 14% over the next few years, valuing Barstool at a cool $450 million. Not too shabby for a company who was valued around $15 Million back in 2016. Erika Nardini, the company’s CEO since July of ’16, was instrumental in driving not only the Penn deal, but a rapid 10x increase in diversified revenue over her three-ish year tenure.
Shortly after the deal was announced, Penn’s stock skyrocketed nearly 11% adding ~$300 Million in value (per Koyfin) – double the price paid. Business is always this easy, right?
Love them or hate them, Barstool has proven to create value for both shareholders and audiences. The Chernin Group bought 51% of the company for $25 Million back in ’16 while nearly 30k stoolies (the most passionate Barstool viewers) are paying for “Barstool Gold,” the company’s premium paid subscription product.
What was most surprising about this tie-up is the ability for anyone with a Robinhood/ stockbroker to now (indirectly) invest in Barstool through Penn’s stock (NASDAQ: PENN). Before the deal was announced, only 1,400 Robinhood accounts held the stock. In the following three days, nearly 27,000 new accounts picked it up, making Penn one of the top 100 owned stocks on the app. Thanks to our friends over at RobinTrack for keeping a pulse on this data.
Is there more room for growth? The house always wins, right? On Jim Cramer’s Mad Money last week, Penn National Gaming CEO Jay Snowden announced there will be a Barstool-branded Sportsbook app in August, right in time for football season. A smart and quick way to start leveraging the Barstool brand for gambling. Penn’s current ~$3.5B valuation is a drop in the bucket (7%) of Las Vegas Sands $49 Billion, which is the world’s largest publicly traded casino and 40% of Cezar’s size.