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Barstool Sports is worth billions!!!
8 months ago Penn National Gaming ($PENN) announced they were acquiring @BarstoolSports in a deal that valued the company at $450M. It was structured as $163M for 36% of the company -- $135M in cash and $28M in $PENN stock.
8 months ago Penn National Gaming ($PENN) announced they were acquiring @BarstoolSports in a deal that valued the company at $450M. It was structured as $163M for 36% of the company -- $135M in cash and $28M in $PENN stock.
After this transaction was completed it meant that $PENN owned 36% of @BarstoolSports, the Chernin Group which took a majority stake in @BarstoolSports years earlier would also own 36% and then @BarstoolSports employees including @stoolpresidente would own the remaining 28%.
Over the next three years $PENN can buy another 14% of @BarstoolSports for $62M which would take their stake up to 50% then all involved parties (Penn, Barstool, Chernin) will have to agree on a price for the remaining 50% of @BarstoolSports.
Back in mid January before the Barstool Sports deal was announced $PENN& #39;s stock price was trading in the mid $20& #39;s which put their market cap around $3.5 billion.
As of yesterday $PENN is trading in the low $70& #39;s which now puts their market cap around $9.7 billion.
As of yesterday $PENN is trading in the low $70& #39;s which now puts their market cap around $9.7 billion.
So how did $PENN add $6.2 billion of market cap in the middle of a pandemic while most of their properties were closed and revenues plummeted. The answer is pretty simple... it was all @BarstoolSports.
In order to appreciate the impact @BarstoolSports has had on @PENN& #39;s stock price you have to look at similar casino stocks and how they& #39;ve performed since Covid:
$MGM = back to 68% of pre-Covid highs
$RRR = back to 65% of pre-Covid highs
$BYD = back to 79% of pre-Covid highs
$MGM = back to 68% of pre-Covid highs
$RRR = back to 65% of pre-Covid highs
$BYD = back to 79% of pre-Covid highs
If we take the average of these three casino stocks plus others like $CZR $TRWH $MCRI you get stock prices approximately 70% back to pre-Covid highs which means if $PENN had not done the deal with @BarstoolSports their stock might be trading at $17-18 right now instead of $70-71
Considering that $PENN has 137 million shares outstanding it means @BarstoolSports didn& #39;t add $6.2 billion of market cap value as implied earlier but perhaps that number is closer to $7.3 billion.
So how has @BarstoolSports added $7.3 billion of value to $PENN& #39;s stock price?
First off, they have @stoolpresidente who might just be the best content marketer in the country.
First off, they have @stoolpresidente who might just be the best content marketer in the country.
Second, @barstoolsports has created a content marketing machine that includes their website, podcasts, merchandise sales, product sponsorships, DDTG (Portnoy& #39;s daily trading live stream) and their dominance in all things related to sports on social media
Third and most importantly, @BarstoolSports has now launched their own sports betting app ( @BSSportsbook) to compete against @DraftKings and @FanDuel.
When $DKNG came public earlier this year via a SPAC IPO it opened everyone& #39;s eyes to the potential for sports betting.
When $DKNG came public earlier this year via a SPAC IPO it opened everyone& #39;s eyes to the potential for sports betting.
$DKNG is now a $20 billion company and $PENN wants a piece of the sports betting market via @BarstoolSports.
Personally I think both companies are winners as the TAM (total addressable market) continues to expand as more states legalize sports betting to increase tax revenues.
Personally I think both companies are winners as the TAM (total addressable market) continues to expand as more states legalize sports betting to increase tax revenues.
Investors are betting that $PENN and @BarstoolSports can leverage their massive audience and fan base to generate low CAC (customer acquisition cost) for their new sports betting app called @BSSportsbook.
Between their websites, podcasts, DDTG and other social media efforts @BarstoolSports reaches tens of millions of potential @BSSportsbook users every month.
Barstool has several of the most popular podcasts in the country including @CallHerDaddy with @AlexandraCooper.
Barstool has several of the most popular podcasts in the country including @CallHerDaddy with @AlexandraCooper.
I& #39;ve seen estimates that the global sports betting market is more than $150 billion annually with companies like @BarstoolSports, DraftKings and FanDuel all fighting for their slice of that massive pie.
If @BarstoolSports and $PENN can carve out 25% market share over the next few years then this recent run up in $PENN& #39;s stock price and the $7.3 billion of market cap added thanks to the @BarstoolSports acquisition makes sense and might only be the beginning of something bigger.
Just like @BarstoolSports is planning to use their online/media dominance to help fuel user growth for @BSSportsbook, I strongly suggest @stoolpresidente and @EKANardini acquire a stock trading app like @WebullGlobal to compete against @RobinhoodApp and other investment apps.
I now firmly believe $PENN could be a $25-30 billion company in 2-3 years if @BarstoolSports can take market share with their @BSSportsbook business as well as looks to enter into new markets where their lower customer/user acquisition costs become a massive advantage.
The future for $PENN is bright but it& #39;s not because of their casinos & gaming business (which I& #39;m sure will bounce back)...but instead it& #39;s because of what @BarstoolSports brings to the table in terms of cheaper/faster customer acquisition for different online & mobile products.
