Dave Portnoy is once again the owner of Barstool Sports and is no longer affiliated with Penn Entertainment.
And even though he said he will “probably hold” the Penn shares he owns, a prospectus filed Friday morning suggests otherwise.
Registering shares for sale through a prospectus does not guarantee a sale, but this is his only opportunity to sell the shares at will.
Portnoy: I think Penn is ‘gonna go up’
Portnoy posted one of his “emergency press conferences” shortly after Penn announced its new 10-year, $2 billion partnership with ESPN to launch ESPN Bet.
The biggest piece of news from his tweet was admitting Penn was denied gambling licenses because of him. Jay Snowden, Penn’s CEO and Portnoy apologist for the years Penn was partnered with Barstool, suggested that had something to do with not getting licensed in New York.
Portnoy then touched on the stock.
“I still own a ton of Penn stock. I’ll probably hold it because I think it’s gonna go up.”
Actions speak louder than words
It’s unclear why Portnoy would, unprompted, say he intended to hold the stock if he did not. Either way, the prospectus at least starts a different conversation.
Portnoy owns 1,481,600 shares, or 0.98% of Penn based on the 151 million outstanding share as of Aug. 1. He registered 1,254,800 of those shares to be sold.
That leaves him with 226,800 shares that are issuable upon conversion of 226.8 Series D preferred stock.
In other words, Portnoy could sell every sellable share he owns.
Just days allowed for possible sale
This prospectus does not have a ton of shelf life: Portnoy can only sell these stocks through Thursday, Aug. 17.
Penn is giving Portnoy a chance to sell before he will be held to certain trading rules:
“We have waived all contractual restrictions on transfer applicable to the shares of common stock covered by this prospectus supplement and agreed to file this prospectus supplement with respect to such shares.”
Any remaining shares as of Friday, Aug. 18, can only be sold under Rule 144, which requires specific conditions be met, or another exemption from registration.
Padding pockets off Penn
If Portnoy sells every share at the proposed maximum offer price of $24.52, he stands to make $30.768 million.
That is a nice payday after the company sold him 100% of Barstool Sports for $1, especially considering Penn paid more than $500 million for the company.
The deal also requires Barstool to abide by “certain non-compete and other restrictive covenants.” Portnoy must also pay Penn 50% of any gross proceeds should he monetize Barstool again.
Portnoy said that is not a possibility, but only time will tell.
