The S&P 500 bets on Penn National Gaming Inc. and Caesar’s Entertainment Inc. amid increasing legalization of sports betting in the US.
Penn PENN,
and Caesar’s CZR,
were announced as incoming members of the S&P 500 index SPX,
Friday afternoon, together with semiconductor manufacturer NXP Semiconductors NV NXPI and Generac Holdings Inc. GNRC, which sells equipment used to generate power. Flowserve Corp. FLS, SL Green Realty Corp. SLG, Xerox Holdings Corp. XRX and Vontier Corp VNT descend to the S&P MidCap 400 to make way. The changes are scheduled to start trading on March 22.
Penn has seen its stock increase nearly 750% over the past year amid the further legalization of sports betting and its investment in the popular sports website Barstool. Penn uses Barstool’s branding on its sports betting platform, which competes with Flutter Entertainment PLC FLTR,
DraftKings DKNG,
William Hill WMH,
Caesar’s and others, such as US states, are legalizing sports gambling. Michigan became the 15th state to allow online sports gambling earlier this year.
Bar stool founder Dave Portnoy has often talked about the stock when he started investing publicly during the COVID-19 pandemic. Penn stock closed at a record high of $ 130.47 on Friday, gaining about 7% in after-hours trading following the announcement.
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Caesar’s is in the process of teaming up with William Hill to create a bigger rival for online sports betting in the US, and its stock has seen a surge in the past year, after falling in late February and early March last year due to Fears of the impending pandemic grew. Caesar’s shares are up 550% in the last 12 months and prices are up more than 5% during out of hours trading.
NXP’s shares have roughly doubled over the past year amid semiconductor shortages that have acutely hit carmakers, a key segment for NXP, and shares rose more than 5% over the extended session. Generac is up nearly 250% in the last 12 months and is up about 4% in late trading.
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Xerox stock has struggled, despite investor Carl Icahn worrying about change at the printing giant when he owned more than 15% of the stock. Shares plummeted after a hostile takeover attempt of HP Inc. HPQ,
failed early last year, and is up 12.6% over the past 12 months, while the S&P 500 was up 58.8%. Xerox shares fell less than 2% on Friday during the off-hours promotion. Shares of SL Green and Vontier also fell less than 2% during non-business hours trading on Friday, while Flowserve was stable.