Escalating Conflict: Vora Instigates Proxy Battle Against Penn Entertainment
Frisky Talk: May 13, 2025, 06:11h.Last updated on: May 14, 2025, 09:51h.
Boss Todd Shriber @etfgodfatherDive Deep Shady Business Casinos Boardroom Drama* Vora's Gunning for Penn's Board Seats** Wants Investors to back his Squad* Claims Penn Slaughtered Stock Value**
Hedge fund hotshot HG Vora has gone full Bang-Up on Pittsburgh-based Penn Entertainment (NASDAQ: PENN), announcing its direct assault on the casino biz bigwig's board members. In a no-nonsense letter to Penn's investors, the money maestro Vora summoned them to action, calling Penn's recent bid to shrink the board members up for election to a measly two seats at the June shareholders meeting an act of brazen self-entrenchment.
Vora has been badgering Penn to put up Will Clifford, Johnny Hartnett, and Carlos Ruisanchez for the board, but the ESPN Bet behemoth dished out some back-talk, only accepting Hartnett and Ruisanchez onto the ballot. Penn sensationally nixed Clifford – an exec who once worked the halls at Pinnacle Entertainment, which your boy Vora acquired seven years back.
"The Board pulled this sneaky move just ten days after they confirmed to us there were three seats open," Vora barked in reference to the last-minute move to cut the number of board seats to the bare minimum. "We reckon this desperate move denies shareholders their fundamental right to pick their own board members and also smacks of legal nonsense and breaching the Board's duty of care."
With a snazzy new website, www.WinAtPENN.com, Vora unleashes the dirt on Penn's bosses, including Jay Snowden and David Handler. The site also serves up info on the "Gold" proxy card, representing Vora's proposed directors.
Penn's Shitty Stock Performance
HG Vora runs a sizable stake in Penn – a cool 4.8% – making it one of the largest shareholders in the casino monolith. So when Vora starts yapping, Penn investors start sweating. And like other stockowners, Vora's not too thrilled about the stock's meager returns.
Even with a healthy 12.77% gain over the past month, Penn shares still floundered 18.47% year-to-date. The stock closed at $16.16 on Tuesday, a far cry from its $140 peak five years ago. With dawdling performance across its gaming portfolio, including Snowden's reign and the Board's so-called "independent" members, Vora laments, "PENN's stock has been a total dog for the last few years."
"PENN's stock has underperformed those of its bitch fcking competitors for an extended period. In our view, this is because their strategic shift has been a complete failure – plagued by reckless capital allocation, shtty deals, and poor execution."
Clifford needs to get a seat at the table
Vora acknowledges Penn's decision to let Hartnett and Ruisanchez join the board as "progress" and concedes that "change is inevitable." But the hedge fund insists that Clifford deserves a place in the mix, too. In his letter to Penn affiliates, Vora points out that when Clifford worked with Penn, the stock did a respectable job compared to the competition, almost doubling the other gambling stocks over his tenure. He's also a master of capital allocation and M&A strategies.
"Due to its brilliance, we believe PENN's board doesn't want Clifford in the boardroom, exposing their shady dealmaking and questioning their f*cked strategy," concludes the hedge fund mogul. "But, if you ask us, that's exactly what Penn needs right now."
Enrichment Data Summary
The face-off between HG Vora Capital Management and Penn Entertainment boils down to boardroom battles, squabbles over capital decisions, and strategy disputes. Here's a quick rundown of the issues at stake:
Dispute Summary
- HG Vora's Criticisms: HG Vora, the major player owning close to 5% of Penn Entertainment's shares, has criticized then egomaniac board and management team for their failed strategies, poor capital allocation, and questionable deal-making that have resulted in significant losses for shareholders.
- Troublesome Transactions: HG Vora has slammed the acquisition of Score Media and Gaming and Barstool Sports, arguing that these investments wasted billions. Penn's stock has lost over $11 billion in market value since early 2021[5].
Proposed Solutions
- Board Nominees: HG Vora wants to install three independent directors onto Penn's board but has been met with resistance, with only two of the hedge fund's candidates gaining support from Penn[6].
- Focus on Core Business: HG Vora is pushing for a refocus on Penn Entertainment's core gambling business and wants the company to abandon its egotistical push into media and technology, which hasn't yielded impressive results[1][2][5].
- Boardroom Battle: The disagreement has escalated into a heated proxy fight, with both parties sending fiery letters to shareholders ahead of the shareholders meeting scheduled for June 17, 2025. Shareholders will ultimately decide on the board nominations during this meeting[1].
Penn's Response
- Attitude Towards HG Vora's Proposals: Penn Entertainment has dismissed HG Vora's full slate of proposals, labelling them "short-sighted" and potentially harmful to shareholders' long-term value. Despite admitting struggles, Penn continues to defend its strategic direction[3].
- Engagement with HG Vora: Penn has engaged in intensive discussions with HG Vora, holding over 25 conversations in the last two years. However, the talks haven't led to a solution favorable to HG Vora's entire set of proposals[3].
Here are three sentences that contain the given words and follow from the text:
- HG Vora's proposition to introduce commercial gaming, such as sports betting, into Penn Entertainment's business strategy could potentially help improve the company's financial performance, as demonstrated by his past successes in similar ventures.
- The financial implications of this boardroom drama extend beyond the gaming industry, as the outcomes of this dispute could impact the broader business market, potentially influencing investment decisions in other companies engaging in sports betting and financial finance areas.
- In his quest to secure board seats, HG Vora's call for investors to back his candidates indicates a broader shift in the commercial gaming market, where finance-savvy individuals with a keen interest in investing are becoming more influential in shaping the future of gaming businesses.
