blog

Who Is Dave Portnoy: AKA Davey Day Trader

Options Trading 101 - The Ultimate Beginners Guide To Options

Download The 12,000 Word Guide

Get It Now
As Seen On
by Gavin in Blog
June 26, 2020 0 comments

Dave Portnoy has been the headlining across the world in the past few weeks, but the reason why might not be what you were expecting.

Mr Portnoy is known as the fun loving and sometimes irresponsible founder of popular satirical sports and pop culture blog called ‘Barstool Sports’.

Barstool sports was founded in 2003 in Milton, Massachusetts but is currently headquartered in New York City.

The websites origins are in print media where it used to print a publication that was distributed in the Boston metropolitan area, the print edition offered gambling advertisements and fantasy sports projections.

After growing at an experiential rate, other sports were taken on by the company when it launched a website in 2007.

As of 2020, Mr Portnoy has an estimated net worth of over $100 million and it is what he has been doing with his amassed worth that has gained immense media attention recently.

Mr Portnoy has begun actively engaging with day trading – for those of you who don’t know what day trading is, below is an exert from an Investopedia article which briefly summarises the concept.

“Day trading is defined as the purchase and sale of a security within a single trading day.  Day traders are attuned to events that cause short-term market moves and attempt to a secure a profit from this.”

 Outlandish comments by Barstool Sports’ Dave Portnoy in relation to his recent day trading obsession have been the focal point of the media’s coverage.

He picked up day trading with the commencement of the worldwide quarantine. With the cancellation of sports and sports betting Mr Portnoy opened an E Trade account and begun to actively day trade and monitor the market.

Whilst streaming to his 1.5 million twitter followers Mr Portnoy said the market “With the volatility, is kind of like watching a sports game”.

“I’m not a financial advisor. Don’t trust anything I say about stocks.”

Contrary to his warning, Portnoy encouraged his viewers to purchase the securities he was investing into, stocks like InspireMD and Smith & Wesson were touted in the live stream, whilst talking negatively towards the world’s fifth richest man and arguably best investor, Warren Buffet.

“I’m sure Warren Buffett is a great guy but when it comes to stocks, he’s washed up… I’m the captain now.” He said.

Portnoy has coined the slogan “stocks only go up!” and has been widely using it to inspire his followers to continue down a similar path as he has.

Market watchers and financial advisors are being forced into asking to what extent retail interest has become a self-fulfilling prophecy in many parts of the market – and what subsequent dangers it poses for sustainability.

Despite Portnoys’ tagline, the market has been trending downwards for the past three days, inherently proving the nonsensical ideals of his slogan.

Who is silly enough to listen to such a guy? Millennials and Gen Zs are.

These two demographics have been the target of the Portnoys ‘investing’ advice and have long been under-invested in the stock market, according to Julian Emanuel, chief equity and derivatives strategist at BTIG LLC.

The quarantine experienced by a majority worldwide has changed this. With the spare time, government stimulus checks and a lack of sport to bet on, people such as Portnoy become a source for entertainment.

His live streams have inspired many Millennials and Gen Zs to wade into stock market trading for the first time.

According to Nate Geraci, president of Investment firm the ETF store, “it’s really been a perfect storm” for Portnoy.

“Investors are seeing firsthand the thrill of victory, the agony of defeat, and he’s doing it with large sums of money, so I think for younger investors, that’s really enticing.” Mr Geraci said.

In January 2020, casino firm Penn National Gambling firm announced that it had purchased a stake in Barstool Sports for $163 million in both cash and stock.

Portnoy claims that he has put $5 million into his day trading account over the prior few months.

“I’m a little surprised that it’s become pretty well known within the financial community,” he said.

“That’s kind of our target audience regardless of what we’re covering, and I think Barstool was popular in those circles to begin with.”

Portnoy hasn’t always been popular with users of his platform as Barstool has been involved in several high-profile scandals and controversies over the last 5 years.

ESPN put a stop to a show hosted by a collection of Barstool personalities following several social-media complaints that the website was being sexist.

The site features daily photos of a scantily clad woman called Smokeshow and in the past rated the attractiveness of female teachers who were charged with having sex with their students.

A settlement was recently reached with the National Labor Relations Board to erase tweets in which Portnoy threatened to terminate the employment of staff who talked to union activists.

Portnoy’s livestreams dubbed Davey Day Trader Global, or DDTG, get hundreds of thousands of viewers on Twitter.

Throughout the live streams, Portnoy mostly screams into a microphone as he goes through his portfolio. He will often go off on tangents and talk about irrelevant topics.

“I bought these sunglasses today,” Portnoy said in one video, putting on a pair of reflective aviator sunglasses. “Are these d****bag sunglasses? I think these may be d****bag sunglasses.”

DDTG doesn’t differ much from other Barstool shows like the raunchy podcast Call Her Daddy does.

Scott Nazeth, a 25-year-old day trader from Vancouver, said he supports Portnoy’s videos and believes older investors such as Buffett are missing opportunities.

“I kind of make fun of some of these investors,” Nazareth said in reference to Buffett. “They just have a hard time understanding the new normal, the new business models.”

With hundreds of thousands tuning in, there’s some concern that people will take Portnoy’s financial advice seriously. However, Portnoy said he’s made it abundantly clear to his viewers not to invest money they can’t afford to lose.

“I’m not babysitting our readers… people got to be responsible” he said.

His mention of stocks appears to have some effect on the market. In July 2020, Portnoy mentioned penny-stock InspireMD, a company that manufacturers products for heart procedures.

The stock had already experienced an elevated volume since early June, when the firm publicized, they would offer an extra 22 million shares. Still, volume rushed to an all-time high of 52 million shares after Portnoy’s touting of the security.

In addition to the ESPN controversy, Portnoy has come under intense fire for disrespecting Buffett in a series of quick videos posted to twitter.

After tweeting a video questioning Buffett’s decision to get out of airlines where he doubts the choices of a “94-year-old guy who lives in Nebraska”, an exchange traded fund tracking airlines stocks in the United States exploded.

This serves to demonstrate Portnoy’s ability to influence the market whether it is direct or indirect.

The 30-day average in the ETF went from around $45 million to about $200 million after his video reached 1 million views.

Portnoy’s videos are unlike anything else the financial industry has seen in the past and the blatant disrespect caused a stir amongst those who agreed and disagreed with the statement.

“I’ve never seen a video quite like that outside of hype videos in football,” said Eric Balchunas, an ETF analyst for Bloomberg Intelligence.

“The financial industry is not used to that kind of thing.” Buffett, who’s only 89, didn’t respond to a request for comment about the video.

With brokerages offering commission-free trading, “the barriers to entry are essentially zero and the cost to transact is essentially zero,” Emanuel said.

Young people, who use technology for all aspects of life, are content with trading apps rather than traditional brokers.

Companies like Robinhood have immense financial appeal to first-time investors with referral promos and free stocks when they sign up – it really is as easy as just signing up and you can invest.

“You look at a platform like Robinhood, in many ways those platforms have game-ified investing,” Geraci said.

He further goes onto comment that investors and day traders such as Portnoy romanticise all aspects of trading which is giving off a falsehood about investing.

Investing, specifically day trading, involves waking up early, doing research and staying on the ball 24/7.

Portnoy doesn’t show this side of his endeavours and subsequently people assume it is easy and therefore do not research adequately, subsequently loosing large sums of money.

Despite the negative media attention, Portnoy has indeed made some strong investments that have produced solid returns – it is hypothesises that this is just luck as he does not use a stringent investing strategy, rather he relies on gut feelings and advice from others.

Earlier this month he bought and recommended Spirit Airlines at $8 per share, currently the stock is trading at around $20 which will secure him and anybody who listened to him a healthy profit.

He commented about the trade stating that “If you want to jump on, you jump on. The facts are I’m not going to feel bad when I have like 400% returns since I started doing this.”

Portnoy did an interview with Business Insider by Skype on April 16 at the conclusion of the trading day.

“I put $US3 million to start into my E-trade account, and that was, like, my day-trade money that I was going to play around with,” he said.

“I have a normal investment account that I don’t touch. So that’s separate. I’ve never really day traded before. I think I’ve bought one stock in my life, maybe two. I jumped into it and started trading.”

As mentioned at the beginning of the article, Portnoy amassed his millions in 2016 when Peter Chenin’s Chernin Digital Group acquired his controversial comedic sports brand.

His net worth inflated in January 2020 when Barstool announced it was selling a majority equity stake to Penn National Gaming in a deal that valued the business at approximately $US450 million.

Since the COVID-19 pandemic occurred, Penn’s stock price has plummeted, as a result, according to Portnoy, his net worth declined heavily.

“I think my net worth was around $US100 million,” Portnoy said. “Literally probably cut in half, maybe more now.”

Trade safe!

Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.vol trading made easy

Leave a Reply

Your email address will not be published. Required fields are marked *

Options Trading 101 - The Ultimate Beginners Guide To Options

Download The 12,000 Word Guide

Get It Now