Shares of Penn National Gaming Inc. plummeted more than 20% on Thursday after a big third-quarter profit miss and allegations of sexual misconduct against Barstool Sports’ founder.
The decline wiped away $2.69 billion from Penn National’s
market cap, the most the gambling company has lost from a stock decline in its 27-year history on the public markets, according to Dow Jones Market Data. While Penn lost about $3.6 billion in market cap on a November day in 2013, that was from spinning off another business.
The 21.1% decline for the stock price was the worst Penn National has absorbed since March 2020, when concerns about the COVID-19 pandemic thrashed the stock market, with casino stocks taking a massive hit. Penn National rebounded soon after on optimism for its tie-up with Barstool Sports, and was added to the S&P 500 index
in March of this year.
Penn National’s spiral began when it reported a hefty miss on quarterly profit before the session opened. Penn’s profit fell nearly 40% from a year ago, with its chief executive blaming the effects of Hurricane Ida and the spread of the Delta variant of COVID-19.
Later in the day, allegations emerged against Dave Portnoy, founder of the Barstool Sports sports-media company, detailing occasions where he was aggressive and rough with women. As detailed in a Business Insider story, one woman who had intimate relations with Portnoy said she felt like she was “just a human sex doll.” Another woman said she fought mental health issues like depression after their encounter.
Portnoy responded to the article on Twitter
where he denied many of the allegations, calling them “jarring,” before adding that “cancel culture has been coming for me for a decade.”
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Penn National shares suffered their lowest close in almost exactly a year, since Nov. 3, 2020. Shares are now down 3.9% in the past 12 months, wiping away a steep rise that happened through the end of 2020 and beginning of 2021.