If you follow any sort of business media, it’s hard to avoid Barstool Sports founder Dave Portnoy these days.
And Portnoy was back on CNBC this week to ramp the Barstool Sportsbook and by extension, partner Penn National.
Portnoy told host Jim Cramer that Penn/Barstool was set to become the “dominant player” in sports betting thanks to its uniquely engaged audience.
Portnoy: We helped to build DraftKings
“Nobody speaks to our audience like we do,” Portnoy said. “It’s why DraftKings and FanDuel paid millions of dollars to advertise with us. I’ve worked with DraftKings for 10 years …we helped build that company.”
Portnoy added: “Penn gets that whole caboodle. Every ounce of energy. What I do with stock, what Dan Katz does with video games, what our one hundred content employees deliver. It’s all going to funnel to Penn.”
Portnoy received a major chunk of Penn National stock when the casino company bought a minority stake in Barstool this year. But he told Cramer he had wanted even more equity.
“I’m confident in what we’re doing and I put my money where my mouth is,” Portnoy said.
Barstool’s successful lockdown pivot
Portnoy’s day-trading gambit in the stock market has generated headlines across the financial media and generated an “army of followers” in the words of Bloomberg.
For instance, trading volume in the airlines ETF $JETS more than quadrupled after Portnoy started talking it up.
Elsewhere during lockdown, Barstool Big Cat (Dan Katz) attracted around 160,000 viewers on Twitch to watch him play NCAA Football. And Barstool’s Call Her Daddy podcast briefly topped charts when Portnoy took over for an episode.
“We are the fastest-growing brand on the internet,” Barstool CEO Erika Nardini told Cramer. “Tik Tok, Instagram, Facebook, Twitter. We are the fastest-growing brand on the fastest-growing platforms. But [analysts] don’t have eyes for that. Some analysts are looking in the wrong direction.”
Bardini was referring specifically to Deutsche Bank analyst Carlo Santarelli, who has a ‘hold’ rating on Penn with a price target of $22.
Penn surges after CNBC appearance
However, the market seemed to buy the Barstool story, with Penn stock climbing 17% on Tuesday to $37.
Nardini told Cramer that Penn should be valued at $12 billion and DraftKings at $4 billion rather than vice-versa.
“The good news is we can prove it,” Portnoy concluded. “Once the app launches [in Q3] and events are up and running at Penn casinos, the number will speak for themselves. I’ve delivered everything I’ve promised for two decades. I’m pretty confident we’ll deliver here.”
He said his full focus would be on sports betting when major sports resumed.
There’s no doubting the enthusiasm of the Stoolies, but there must be at least some questions about the app Penn is building from scratch. That kind of tech project is not simple for experienced sports betting companies, nevermind newcomers.
The integrated media model is not yet proven in the US sports betting sector. But if Penn and Barstool deliver a product to match their fan engagement, they could be the ones to challenge the FanDuel/DraftKings duopoly.