Market Loves Penn National Cancellation
Penn National Gaming (PENN: 25.62 0.00%) announced today it would no longer pursue its plan to erect a new Atlantic City casino, and the market reacted by sending the stock price jumping upward. Penn National accompanied its fourth-quater earnings report with confirmation of suspicions that it would abandon plans to build a new casino in an undeveloped area of the city, apart from the other eleven existing casinos.
Investors responded to the decision, and the comfortable cash position enjoyed by Penn National after aborting an attempt to go private last year, by driving the share price up almost twenty percent, making Penn National one of today’s big winners.
The stock closed at $20.83, up from the previous day’s close of $17.46.
Penn National joined MGM Mirage, Pinnacle Entertainment, and developer Curtis Bashaw in deserting plans to add to the resort casinos in Atlantic City. Further, the Trump Marina, scheduled to become a Margaritaville-themed casino after finalization of sale, has found itself in limbo as financing problems have caused postponement of the sale closing.
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