Despite a 19.52% decline in stock value year-to-date, Penn Entertainment (NASDAQ: PENN) attracted new investments from David Einhorn’s Greenlight Capital during the third quarter. A recent 13F filing with the Securities and Exchange Commission (SEC) revealed that Einhorn’s hedge fund owned approximately 5.6 million shares of the regional casino operator at the end of the third quarter. This position would be worth over $117 million based on Penn’s closing price of $20.94, assuming Greenlight has not changed its stake since the start of the current quarter.
This investment comes despite the stock’s current trading price being below the $22.69 average Greenlight paid when initially purchasing in the first quarter. Einhorn had argued that markets were undervaluing Penn’s ESPN Bet unit, suggesting that if the online sports betting arm captured even a fraction of DraftKings’ (NASDAQ: DKNG) market value, it could add as much as $20 per share to Penn’s stock.
Penn Entertainment is Greenlight’s sole direct gaming investment. However, the hedge fund holds a stake in Barry Diller’s IAC/InterActiveCorp (NASDAQ: IAC), the largest non-institutional shareholder in MGM Resorts International (NYSE: MGM).
Elsewhere in the gaming sector, Tiger Global Management, led by Chase Coleman III, acquired a significant position in FanDuel parent company Flutter Entertainment (NYSE: FLUT) during the third quarter. Coleman’s hedge fund, which manages about $46 billion in assets, purchased 3.38 million shares of the Dublin-based gaming company. Coleman is renowned as one of the “Tiger Cubs,” proteges of the late Julian Robertson, who alongside George Soros, is considered a pioneer of macro hedge funds.
Soros’s investment firm, Soros Capital Management, also increased its stake in Flutter significantly, reporting ownership of 94,496 shares at the end of the third quarter, up from 5,020 shares in June. Soros has a long history of gaming investments, although most of these have been short-term.
The growing interest from heavyweight investors like Soros Capital Management and Tiger Global Management underscores the wisdom of Flutter’s decision to list its shares in New York and later shift its primary listing from London to New York. These strategic moves, aimed at enhancing stock liquidity and expanding the investor base among both professional and retail investors, appear to be paying off. The increased institutional interest following a few 13F filing seasons since Flutter’s New York listing seems to validate the company’s strategy.
 dips 19.52% YTD but gains $117M investment from David Einhorn. Major moves in online betting market spotlight investor confidence.){kind=link}