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what happened
shares Penn Entertainment (Payne -13.65%) The withdrawal came after the company’s first-quarter earnings report was mixed and the company was embroiled in controversy after the casino operator fired a popular media personality.
The stock closed down 13.7% on the news.
so what
Penn, partly known as the online gaming company and parent of Barstool Sportsbook after it fully acquired Barstool Sports earlier this year, said revenue rose 7% to $1.68 billion in the quarter, beating estimates of $1.59 billion. .
The company noted that its strong performance in the Northeast was offset by weaker results in the South.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDAR) fell 3.3% to $478 million, as its interactive or online business continued to lose money, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for a loss of $5.7 million.
Operating income for the quarter also fell to $199.1 million from $292 million, while net income benefited from property gains.
Also, the firing of a Barstool media personality after he made a racist remark while singing along to a rap song seems to have had some ramifications.
On Twitter, some Barstool fans said they would sell their Penn stock holdings, while others blasted the company. Penn defended the move, saying the incident jeopardized its gambling license.
what to do
Penn raised its revenue forecast for the year to account for the Barstool acquisition, forecasting revenue of $6.37 billion to $6.81 billion, compared with the consensus estimate of $6.46 billion, but said it was neutral to EBITDA.
The impact of Ben Mintz’s firing is unclear, but it highlights the risk Penn took when it bought Barstool. Barstool founder and brand ambassador Dave Portnoy responded to complaints about the termination on social media.
The move seems unlikely to have lasting effects on Penn, but it does signal that the company is at a critical juncture, as it now fully owns Barstool. Meanwhile, declining EBITDA also appears to be weighing on the stock.
Jeremy Bowman No position in any of the stocks mentioned above. The Motley Fool recommends the following options: Penn Entertainment January 2025 Long Call $25 and Penn Entertainment January 2025 Short Call $30. The Motley Fool has a Disclosure Policy.
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