PENN Entertainment is taking heavy criticism from one its biggest investors for “under performance” and alleged mismanagement. The barbs are coming from HG Vora, a hedge fund which oversees more than $7 billion worth of assets including a large portion of PENN. It’s a tricky situation for PENN that could significantly alter the company’s future and executive suite.
HG Vora’s critiques of PENN Entertainment have come in the form of filings with the SEC that were filed this year. Earlier in the month, the hedge fund operator called out alleged mismanagement that’s lead to an undervalued stock price. To get the company back on track, HG Vora wants to put some of its own people on the PENN Entertainment Board of Directors.
“Given the persistent under performance of the Common Stock and the Issuer’s capital allocation track record, amongst other areas of concern, the Reporting Persons have requested that the Issuer afford them the right to designate highly qualified directors who would be committed to working with the Issuer’s management and fellow Board members to help the Issuer realize its full potential,” the letter read.
In comments reported on by SBC Americas, PENN CEO Jay Snowden defended his company, and its goal of capturing 20 percent of the US sports betting market saying, “I think if we’re at scale, and we’re on the podium in every state, or most every state, which we plan to be, then we think we can probably get close to the margins.”
With an 18.5 percent ownership stake, HG Vora is a voice that PENN Entertainment is stuck listening to, whether they like it or not.