- Hedge fund supervisor considerably elevated stake in on line casino inventory in Q2
- Transfer comes after agency boosted Penn place in Q1
For the second consecutive quarter, David Einhorn’s DME Capital Administration elevated its stake in regional on line casino operator Penn Leisure (NASDAQ: PENN).
Hedge fund supervisor David Einhorn. His agency added to its Penn Leisure stake in Q2. (Picture: Institutional Investor)
A brand new Kind 13F submitting with the Securities and Change Fee (SEC) signifies that within the second quarter, the hedge fund lifted its place within the gaming inventory to roughly 7.5 million shares from about 6.3 million within the first three months of the yr.
Penn, the one gaming inventory at present discovered within the DME Capital portfolio, was one in all two names to which the cash supervisor added to beforehand current positions throughout the April by way of June interval. It was a prescient transfer by Einhorn as shares of Penn are greater by 11% over the previous 90 days.
The hedge fund initiated two positions within the second quarter whereas eliminating one other pair. It additionally lowered its publicity to Peloton Interactive (NASDAQ: PTON). The Kind 13 doesn’t embody commentary on why cash managers add to, remove, or scale back particular investments.
Einhorn Didn’t Shy Away from Penn Controversy
Previously referred to as Greenlight Capital, DME Capital initiated its place in Penn within the first quarter of 2024. The latest addition to that stake marks a minimum of the third time it’s been upped since DME acquired concerned with the inventory early final yr.
Curiously, DME upping its Penn funding within the June quarter got here because the on line casino operator was locked in a proxy battle with activist hedge fund HG Vora. Vora pushed to have three administrators added to Penn’s board. The gaming firm added Johnny Hartnett and Carlos Ruisanchez, however objected to the addition of William Clifford, who has preexisting ties to Penn.
There’s nonetheless authorized maneuvering going down concerning Clifford’s candidacy, with Vora noting he acquired ample help from Penn traders on the operator’s June shareholder assembly. For now, the depth between Penn and Vora seems to have cooled off.
Earlier this yr, On line casino.org reached out to DME Capital for touch upon the Penn/Vora scenario, however the hedge fund didn’t reply to that request.
Penn Inventory Might Have Extra Upside
It’s unclear as to why Einhorn’s hedge fund boosted its Penn funding within the second quarter, however Wall Avenue is warming to the inventory. The latest debut of a land-based on line casino in Joliet, In poor health., and the early 2026 launch of the revamped Aurora, In poor health., property are seen as catalysts for Penn at a time when Illinois gaming income is rising.
Whereas Penn’s ESPN Wager unit usually instructions many of the consideration, even overshadowing its regional casinos, analysts see pathways to earnings earlier than curiosity, taxes, depreciation, amortization, and restructuring or lease prices (EBITDAR) progress on the again of recent initiatives.
“We imagine a ‘regular’ ramp all through the quarter ought to enable for a neater setup in 4Q25 for the general enterprise,” wrote Residents Fairness Analysis Analyst Jordan Bender in a brand new report. “Simple comps (no new provide) place the corporate as one of many extra favorable regional gaming firms within the area, in our view, and whereas on-line losses subside, we imagine PENN’s lease-adjusted leverage will decline to five.3x by YE26, from 7.0x in 2Q25.”
