Penn National Gaming Makes Additional Public Shares Available

Penn National Gaming Makes Additional Public Shares Available

Penn National Gaming announced on Sept. 24 that it was offering an additional 14 million shares of common stock. The company said it expects to use the net proceeds from the offering for general corporate purposes.

The offering comes after Penn National launched the Barstool Sportsbook mobile app on Sept. 18 in Pennsylvania, the state in which it is based.

Penn National closed the offering on Sept. 30, according to a news release. The company raised gross proceeds of $962 million in the sale, the release said.

Penn National has a gaming footprint that includes 41 properties across 19 states. Its businesses include traditional casinos, race tracks and online gaming.

Notably, the Barstool Sports betting app launch produced the approximate results over its first weekend according to an SEC filing:

  • 24,000 registrations in Pennsylvania.
  • 30,000 downloads in Pennsylvania (approximately 35,000 including downloads during a previous test period).
  • 180,000 downloads in the U.S.
  • 12,000 first-time depositors in Pennsylvania with an average deposit size of approximately $243.
  • $11 million in total handle.

The launch period was accompanied by a campaign of promotional sign-up bonuses for new customers. Barstool Sports should quickly joins the ranks of the top sportsbooks in Pennsylvania.

More on the Offering

In addition to the shares offered, Penn National intends to grant the underwriters a 30-day option to purchase up to 2.1 million additional shares of its common stock in the offering. Goldman Sachs & Co. LLC, BofA Securities and J.P. Morgan are the joint book-running managers for the public offering, according to a news release.

By midday on Sept. 24, Penn National stock (PENN) was trading in a range of $64-$67 a share. It began the year trading in the range of $25. Some analysts have recently set a target for the stock price at $75-$85.

In late January, Penn National entered into an agreement to acquire a 36% interest in Barstool Sports, a digital sports media company, for approximately $163 million in cash and convertible preferred stock. The sometimes controversial Barstool Sports brings with it a sizable database of followers.

Since the steep pandemic-driven drop in stocks almost across the board in March when Penn National’s own stock price briefly dropped below $5, the gaming company’s stock has risen dramatically reflecting investor enthusiasm for the prospects of online gaming and sports wagering.

Earlier this year in April, daily fantasy and sports wagering company DraftKings (DKNG), primarily an online operator, became publicly traded as a result of a SPAC (special purchase acquisition company). Soon after in June, DraftKings offered 33 million more shares.

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