Casino operator Penn National Gaming (PNG) saw its shares tumble on Thursday despite the initial success of its Barstool Sportsbook app in Pennsylvania.

On Thursday, PNG announced that it had commenced an underwritten public offering of 14m shares, with a 30-day option for the underwriters to acquire an additional 2.1m shares. PNG says it will use the proceeds for general corporate purposes, which hopefully includes paying back some of the debt it took on when the pandemic hit.   

Investors (perhaps even some of those Robin Hood types) promptly ran for the exits. PNG’s shares closed Thursday’s trading down 7.3% to just under $64 and lost slightly more ground in after-hours trading. The shares are now well below Tuesday’s peak of $74.36 but remain considerably better than their $4.52 nadir in March as COVID-19 forced the shutdown of nearly all US casinos.  

In announcing its share sale, PNG offered some updates on its recent activity, including the performance of its reopened casinos in the third quarter through September 21. Pandemic health and safety restrictions resulted in revenue falling 11% from the same period last year, while earnings were down 18%.