After DraftKings announced yesterday that it is being bought by Special Purpose Acquisition Company Diamond Eagle (DEAC) and merging with SBTech in a deal that values the combined U.S. sports betting pure play company at an enterprise value of $2.7B, Morgan Stanley analyst Thomas Allen said he sees this new valuation as having a positive read-through for Boyd Gaming (BYD), Eldorado Resorts (ERI) and Penn National (PENN), which he thinks are likely to also be meaningful long-term beneficiaries from U.S. sports betting. He also sees the read-through being positive for MGM Resorts (MGM) and Wynn Resorts (WYNN), though to a lesser extent given the scale of those two.

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Reports Q1 revenue $960.5M, consensus $958.74M. Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "After a record 2023, the first quarter of 2024 was a challenging start to the year. Severe winter weather had a significant impact on our Midwest & South segment early in the quarter while we also experienced increased competitive pressures in the Las Vegas Locals market. However, throughout our business, many of the positive trends from the fourth quarter continued into the new year. By focusing on our disciplined operating and marketing strategies, we have been able to maintain strong operating margins. Additionally, our significant cash flows and strong balance sheet allow us to continue returning capital to our shareholders through our ongoing share repurchases and quarterly dividend programs. Looking ahead, we remain confident in our ability to successfully navigate the current environment and deliver value to our shareholders."

In the firm's Q1 letter to investors, David Einhorn's Greenlight Capital disclosed new long positions taken during the quarter, including taking stakes in HP Inc. (HPQ), Penn Entertainment (PENN) and Roivant Sciences (ROIV). In the letter, the firm stated that it established a new "medium-sized position" in Penn at an average price of $22.69 per share, arguing that "were the market to credit PENN with merely 15% of DraftKings' value, [Penn's ESPN BET] segment alone would be worth $20 per share." On HP Inc., Greenlight stated that it had established an initial position at an average price of $30.76 per share, adding that it believes "that we are, at a minimum, on the cusp of a normal PC refresh cycle, which should drive earnings above estimates." On Roivant, Greenlight said it had established a "small long position," adding that "in addition to an exciting pipeline, ROIV has a strong track record of positive trial results and successful monetization of pharmaceutical assets." Einhorn's Greenlight Capital also noted that it reduced its Teck Resources (TECK) long position into strength during Q1 and that the firm bought a "small position" in Liberty Global (LBTYA) during Q1.