Penn Entertainment Battles Activist Investor Post-Board Shake-Up as Retail Traders Go Bullish

On Monday, activist investor HG Vora Capital Management took aim at Penn Entertainment (PENN), a company involved in casinos and sports betting, accusing them of reducing their board size to prevent the appointment of three nominees put forward by the hedge fund.

HG Vora, which owns less than 5% of Penn's shares, stated that the company’s actions were “self-serving” and announced they will keep advocating for a seat on the board.

Penn's stock dropped by 2.5% during the extended trading hours after declining by 2% in regular sessions on Monday.

On Friday, Penn Entertainment announced its plan to appoint two out of the three nominees suggested by HG Vora and revealed it would reduce the size of its board from nine to eight members, which means only two positions will be open for voting during the June gathering.

In a statement, HG Vora also raised doubts about whether Penn would indeed proceed to appoint its nominees, specifically mentioning Johnny Hartnett and Carlos Ruisanchez—executives with background in the gaming sector—as new members of their board.

The activist investor has raised objections regarding Penn's investments in online gambling activities. They claim that the firm squandered approximately $4 billion trying to enter the realm of online sports betting, which consequently led to a decline in shareholder wealth.

Penn shares have dropped 87% since reaching their peak in 2021.

On Romero.my.id, retail sentiment shifted to 'bullish' from 'bearish' within just one day.

A customer suggested casting their vote for HG Vora's proxy.

Penn manages 43 facilities across 20 U.S. states through brands such as Hollywood Casino, Ameristar, and Boomtown, and also runs the ESPN Bet site.

The company's stock has dropped by 20.2% so far this year.

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