HG Vora Challenges Penn Entertainment Leadership in Proxy Battle
A proxy battle is heating up at Penn Entertainment as HG Vora Capital Management pushes for boardroom changes. The investment firm, which holds a 4.8% stake in the company, has nominated three independent directors, arguing that Penn’s leadership has mismanaged its interactive gaming strategy. HG Vora claims that Penn wasted nearly $4 billion on failed acquisitions and media partnerships and that poor decision-making has cost shareholders dearly.
Why HG Vora Wants Change
HG Vora has raised several major concerns about Penn’s leadership. The firm believes the current management team has made critical mistakes that have damaged shareholder value.
Failed Interactive Strategy
The firm criticizes Penn for reckless spending in its online gaming and sports betting operations. Poorly negotiated deals have led to significant financial losses.
Stock Performance Collapse
Over the past four years, Penn’s stock has dropped 81%, while competitors like Boyd Gaming and the S&P 500 have posted gains of 73% and 69%, respectively.
Weak Corporate Oversight
HG Vora accuses the board of failing to hold leadership accountable, allowing high executive pay despite poor results.
Lack of Consequences
The firm argues that Penn’s leadership has faced no real consequences for its mistakes, leaving investors to bear the burden.
HG Vora’s Proposed Board Members
To drive change, HG Vora has nominated three directors with expertise in gaming, finance, and sports betting:
- William J. Clifford – Former Penn National Gaming CFO, credited with delivering 20-fold shareholder returnsduring his tenure.
- Johnny Hartnett – Former CEO of Superbet Group and a key executive at Flutter Group, with deep experience in online sports betting.
- Carlos Ruisanchez – Co-founder of Sorelle Capital and former CFO of Pinnacle Entertainment, where he helped generate fivefold investor returns.
Penn’s Response and the Road Ahead
Penn Entertainment has acknowledged the nominations and stated that its nominating and governance committee will review the candidates. However, the final decision rests with shareholders, who will vote at the 2025 Annual Meeting.
In response, HG Vora has launched a lobbying campaign to gain investor support. The firm is appealing to shareholders who are frustrated with Penn’s financial struggles and declining stock performance.
If HG Vora’s candidates secure board seats, Penn could undergo significant strategic shifts:
- Reevaluating costly partnerships, such as the ESPN Bet deal.
- Shifting focus from acquisitions to profitability and operational efficiency.
- Implementing stricter financial controls to rebuild investor confidence.
If Penn’s current board retains control, it will need to prove its strategy is working to regain shareholder trust.
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