Shares of casino operator Penn National Gaming (NASDAQ:PENN) rose just shy of 11% in July according to data from S&P Global Market Intelligence. Through the first seven months of 2020 the shares are up a huge 32% (likely helped along by a new sports betting business the company is working on). But that didn't happen in a straight line, with the stock down a painful 80% at one point following the economic shutdowns related to COVID-19. July wasn't actually wasn't the biggest month for the stock, but there was still some important news to digest.
The reason for Penn National Gaming's 80% plunge was the global effort to contain the spread of the coronavirus, which shut down non-essential businesses and saw governments ask residents to stay home. Both are terrible for casino operators, which make money by luring gamblers en masse to their facilities for what is a very non-essential form of recreation. However, after shutting down for a spell, the company has started to reopen its doors again.
That process started in late May and continued in June and July. In early to mid-July the company announced that it had reopened 37 of its 41 properties, accounting for roughly 90% of its operations. Although the casinos it operates are being run under strict guidelines for safety and occupancy, they are very much open for business. That's a vital first step in the process of getting back to some semblance of normal, which could be a slow process. However, investors are clearly pleased that Penn National has successfully reopened its doors.
Penn National Gaming's stock has had a wild ride so far in 2020. In fact, July was a pretty tame month, all things considered. That said, with the resurgence of COVID-19 cases in states that have started the reopening process, long-term investors need to remain vigilant here. There's likely to be more bumps along the way as Penn National Gaming tries to get its business back on track in the midst of a global pandemic.