Published on: February 17, 2026, 05:43h.
Updated on: February 17, 2026, 05:43h.
- DME Capital offloaded approximately 700,000 shares of Penn Entertainment in Q4
- The hedge fund likely sold more of the regional casino stock in the previous quarter
- The investment firm continues to hold over six million shares of the gaming stock
David Einhorn’s DME Capital Management has decreased its investment in Penn Entertainment (NASDAQ: PENN) during the last quarter of 2025.
The hedge fund’s most recent Form 13F submitted to the Securities and Exchange Commission (SEC) indicates it entered 2026 holding 6.04 million shares of the regional casino operator, down from 6.77 million at the commencement of Q4.
It seems plausible that the fourth quarter was the second consecutive period where DME reduced its interest in Penn, having held 7.5 million shares of the gaming entity at the conclusion of June 2025. Penn remains the sole casino stock within the DME portfolio, yet the hedge fund maintained various other consumer discretionary assets as of the end of 2025.
Possible Reasons Behind Einhorn’s Decision to Reduce Holdings
Investment managers are not legally obliged to disclose their reasons for buying or selling stocks; therefore, no formal explanation has been given for DME’s reduced interest in Penn.
Nonetheless, Einhorn’s choice to scale back his firm’s stake in Penn may stem from dissatisfaction with a stock that has lost nearly 46% of its value over the past year, as he may believe that reallocating that capital elsewhere could yield better returns.
Form 13F submissions do not clarify the timing of transactions. However, it’s noteworthy that the fourth quarter coincided with Penn’s announcement of discontinuing its troubled ESPN Bet initiative. While this development was viewed positively by several investors, the stock continued to decline afterward and currently sits at its lowest points in about six years.
Additional Insights from 13F Filings
On Tuesday, there was a surge of Form 13F filings, many of which included gaming stocks. Appaloosa Management, led by David Tepper, owner of the Carolina Panthers, divested its shares in Caesars Entertainment (NASDAQ: CZR), another casino stock facing challenges. The hedge fund held this stock for over two years, suggesting a likely loss on that investment.
During Q4, several other hedge funds retained their positions in gaming equities, including Flutter Entertainment, the parent company of FanDuel, and MGM Resorts International (NYSE: MGM).
On a brighter note, Ricky Sandler’s Eminence Capital increased its holdings in DraftKings throughout the final months of 2025, owning 8.4 million shares at the end of Q4, up from 6.3 million at the end of the previous quarter.