HG Vora Capital sends PENN's stock shooting briefly

HG Vora Capital Management, a hedge fund, has had a positive impact on PENN Entertainment’s stock, a gaming company. The former announced last week that it had invested further in the gaming company and is now looking to make a number of changes to the company’s Board of Directors.

The fund’s boss and former banker at Goldman Sachs, Parag Vora, is reportedly prepared to wrestle for the pews, according to the Wall Street Journal, citing sources close to the matter. Vora, whose fund now owns an 18.5% stake in PENN, increasing its previous holding, is also looking to enact the changes on the Board of Directors very soon.

Meanwhile, the share price for PENN jumped by 7% on Thursday to $26.86, but has since declined to $26.02 when stock markets closed. It’s not yet certain what will happen when markets reopen on Tuesday, but HG Vora will continue to have a bearing on the stock movement.

For one, Vora is determined to install capable members of the Board who would do something that in his opinion the current tandem has fallen short of – drive value for the company’s stock. In a lengthy filing to the US Securities and Exchange Commission, Vora did not hesitate to outline the present difficulties PENN faces and a possible way forward to remedy the situation:

"Given the persistent underperformance 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 Wall Street Journal reported that should PENN try to resist Vora’s charm offensive, the fund and its executive are going to try and force the change. This comes just in time as there will be an annual meeting held by PENN which is due to commence on January 8 and conclude on February 7, 2024.

It’s not clear how many seats Vora is looking to secure but the goal remains unchanged – ensuring the value of the PENN stock, which should not be too difficult now that ESPN Bet has launched.

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