In the last three months of 2025, David Einhorn's DME Capital Management decreased its ownership of Penn Entertainment (NASDAQ: PENN).
According to the hedge fund's most recent Form 13F submitted to the Securities and Exchange Commission (SEC), it had 6.04 million shares in the local casino operator at the beginning of 2026, a decrease from 6.77 million at the beginning of the fourth quarter.
Given that DME owned 7.5 million shares of the gaming stock at the end of June 2025, it seems likely that the December quarter was the second in a row in which it decreased its exposure to Penn. At the end of 2025, the hedge fund owned a number of other consumer discretionary names, but Penn is still the only casino stock in the DME portfolio.
Einhorn's Decision Could Be Due to Penn's Weakness
Since money managers are not required by law to reveal the reasons behind their stock purchases and sales, DME has not provided an official explanation for reducing its exposure to Penn.
However, Einhorn's decision to reduce his company's investment in Penn might be as straightforward as his displeasure with a stock that has lost about 46% of its value in the last year and his conviction that part of that money would be better used elsewhere.
Form 13Fs don't specify the precise time of transactions, but in the case of DME and Penn, it's noteworthy that Penn announced in the fourth quarter that it was abandoning the problematic ESPN Bet endeavor. Even though many in the investment world saw the statement favorably, the stock continued to decline after it was made, and it is currently at its lowest points in about six years.
In Additional 13F News
There were a lot of Form 13F filings on Tuesday, several of them included gaming brands. Another faltering casino stock, Caesars Entertainment (NASDAQ: CZR), was sold by Appaloosa Management, the hedge fund owned by Carolina Panthers owner David Tepper. The fact that the hedge fund held the stock for longer than two years suggests that it probably lost money on the deal.
Other hedge funds, including as MGM Resorts International (NYSE: MGM) and Flutter Entertainment, the parent company of FanDuel, continued to be exposed to gaming stocks throughout the fourth quarter.
Positively, in the last three months of 2025, Ricky Sandler's Eminence Capital increased its ownership of DraftKings. At the end of the fourth quarter, that money manager owned 8.4 million shares of the sports betting stock, up from 6.3 million at the end of the previous quarter.
