Dave’s jovial attitude masked the corporate life-or-death situation he was in…
Put simply, $550 million was on the line.
Now, Dave might not have known the exact number at the time. But in early 2020, he certainly knew trouble was brewing…
The COVID-19 pandemic had just struck. It threatened to bring business to a standstill. And at first, it didn’t seem like Dave could do anything to control the situation.
Dave founded his company in 2003. And after COVID-19 started spreading in 2020, his way of life hung in the balance – as did the lives of all his employees.
You see, just before the pandemic, Dave received a massive buyout offer for his company. But then, the world shut down. And his company’s future was in jeopardy.
So Dave did what any skilled founder would do. He leaned on his charisma, built his company’s strong standing with its customers, and spent hours every day making sure they never forgot the brand that he had built.
It worked…
Traffic across the company’s main website jumped nearly 20%. Its social media traffic soared almost 50%. And importantly, the buyout plan remained on schedule.
In short, Dave won. But most investors don’t see it that way…
That’s because I’m talking about Dave Portnoy, the founder of Barstool Sports.
As you might know, Barstool Sports is a digital-media company that produces sports and pop culture content. And Portnoy isn’t one to shy away from sharing his thoughts…
If you’ve followed the news at all over the past few years, I’m sure you’ve seen his name. Portnoy made himself the poster child of “meme stocks.” And he’s widely ridiculed for it.
It’s easy to poke fun at the guy. And I have to admit that I’ve enjoyed taking some shots at his expense.
After all, he repeatedly told his legions of followers that “stocks only go up.” Then, he would melt down publicly on social media whenever his holdings collapsed.
It was a circus… And that was the point.
Portnoy was trying to save his business using a clown-like persona. He wanted everyone to recognize Barstool Sports. And he succeeded and wound up building value in the process.
You see, Barstool Sports started out about two decades ago as a blog featuring irreverent sports commentary. Portnoy was darn good at that. And he soon built a cult-like following.
But the real prize was still ahead. His innovative thinking ultimately made Barstool Sports worth nearly $550 million.
Today, Portnoy has branched out. He’s on the leading edge of sports betting.
Over the past couple decades, Portnoy built his brand around high-enthusiasm sports coverage. And as soon as the law allowed, he started focusing on the odds.
When the pandemic hit, Portnoy reminded his audience that all of life is a gamble. He kept up the gambler persona and made things fun for the massive customer list he was building.
To many folks, Portnoy seemed to be on an emotional roller coaster. But in reality, he was doing all he could to keep his business alive. And the antics became part of his brand.
Each emotional day of stock trading was a statement. He was telling customers that even in the hardest of times, you can still escape with a bet on your favorite proverbial horse.
Now, it’s worth noting that he never worded it quite like that. Instead, Portnoy simply shouted, cried, and waved his arms around. And all the theatrics proved to be worth it…
That’s because this past August, one of the world’s biggest gambling companies announced that it would buy the rest of Barstool Sports by early this year. (It already owned 36%.)
The final sticker price is roughly $550 million. Some experts think that’s too much to spend on “Dave the Clown”… the meme-stock poster child… and the emotionally volatile gambler.
But the money and the outcome made it clear…
Dave’s act got the deal done. And sometimes, that’s what it takes in business and investing.
Good investing,
Marc Chaikin
