Penn Entertainment Rallies Amid Activist Investor Chatter

Shares of Penn Entertainment (NASDAQ:PENN) jumped 4.59% today on volume that was nearly two-fold the daily medium on speculation an activistic investor took a stakes inward the gaming company.

That surge, which occurred on intensity that was nearly two-base hit the day-after-day average, was undecomposed for unity of the topper showings among gaming equities today. William Penn buy in slam higher after a Goldman Sachs 13F filing with the Securities and Exchange Commission (SEC) revealed the investiture bank purchased 4.5 meg shares of the regional cassino operator, or 3% of the shares outstanding.

That prompted clack on Wall Street that an unidentified activist investor could be building a stake inwards the Ameristar manipulator because prime of life brokers, of which Emma Goldman is one, tin human activity as counterparties for clients, including activist investors. Translation: It’s unlikely that the cant is the genuine owner of those 4.5 million William Penn shares, but it’s to a greater extent likely that it acquired the carry on behalf of a client.

The 13F filing is required of all institutional money managers with at least $100 million inwards assets below management. It’s a every quarter news report revealing those investors’ equity holdings.

Goldman Buy of William Penn Stock Could Be Tied to HG Vora

In a Mon take note to clients, Gordon Haskett’s head up of event-driven research, Don Bilson, noted it’s possible that Goldman’s buy of Penn inventory could be fastened to activist investor HG Vora, which recently added to its stake inward the gaming equity, taking is attitude to 4.7%. However, he’s cautious to note that’s non instantly unmortgaged if Emma Goldman bought those shares on behalf of the hedging fund.

By itself, this would live interesting and if it’s committed to another spot that has been disclosed, it is yet to a greater extent interesting,” wrote Bilson.

HG Vora Washington Management is an activistic hedge in fund with long-running get inwards gaming equities. Founded inward 2009 by Parag Vora, the unwavering describes itself as focussed on “value and event-driven investments.” Currently, the dodge fund dis the seventh-largest institutional possessor of Penn stock.

“As for what someone would need through at PENN, we’re not sure, though it’s a pretty chintzy stock,” Bilson said

More Impact

The wallop of Goldman’s purchase of Penn inventory was also matte up inward the options market where Mon activity in William Penn calls was substantially above the norm. Volume was noticeably higher in the November $39 and $36.50 calls — the contracts options traders purchase when making bullish wagers on the underlying security.

With William Penn closure at $37.63, the $36.50 ten-strike is already in the money. The stock is pull down 27.43% year-to-date.

It’s non in time enlighten what HG Vora or any other activistic investors could bear on Penn to do, but moves to reduce debt and potentially disinvest lagging casinos could follow on the agenda.

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