Portnoy’s Complaint – PNG Hoping to Weather Sex Storm and Poor Q3

The double whammy of a limp Q3 and a sex storm swirling around its Barstool Sports affiliate has clipped a cool US$2 billion (£1.48bn/€1.73bn)—and counting—off North American giant Penn National Gaming’s (PNG) market valuation.

Overall, PNG shares are now down by over 20 per cent – wiping out all the company’s post peak Covid-19 gains of late 2020 and this year 2021.

For the moment direct PNG sources are staying mum on the allegations of rough sex made by three women against Barstool founder Dave Portnoy. Penn own a 36 per cent stake in Barstool.

Portnoy, previously in trouble for controversial comments on women and sex, has vehemently denied the accusations, claiming they are a “hit job” and “100 per cent not true”.

After paying income taxes of US$36.4 million (£27m/€31.3m), Penn recorded a total net profit of US$86.1 million (£63.8m/€74.46m) for the third quarter, ending September 30 – a plunge of 39 per cent, year-on-year.

Penn, who operate 44 racing and gaming facilities in North America, reported revenue of US$1.51bn (£1.19bn/€1.3bn) in Q3, up almost 34 per cent over the same period last year.

But operating expenses grew significantly, hitting US$1.27 billion £941m/€1.1bn), nearly 37 per cent up.

“While the future looks bright and we believe we can continue to generate revenue and adjusted EBITDA above 2019 levels, the Delta outbreak reminded us in the third quarter [that] the environment remains uncertain,” said Felicia Hendrix, PNG Executive Vice President.

And Jay Snowden, Penn President and CEO, sought to ameliorate the negatives by pointing out:

“We achieved many significant milestones in the third quarter. [For example] we successfully launched the Barstool Sportsbook mobile app in five states, which more than doubled our footprint.”

Equally significantly for its projected growth in iGaming, last month PNG finalised its US$2 billion (£1.48bn/€1.73bn) acquisition of theScore sportsbook.

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