Shares of Penn Entertainment spiked 20% Friday after an activist investor sent a letter to its board of directors ripping management for a failed focus on sports betting and mobile gaming and saying the company would be worth more if sold.

“The Company eschewed its tried-and-true strategy of expanding its brick-and-mortar casino operations in lieu of a ‘bet the house’ focus on constructing an online sports betting business to compete with market leaders DraftKings and FanDuel,” wrote Donerail Group managing partner Will Wyatt in a letter made public by the asset manager Friday.

Donerail is an asset manager that manages funds on behalf of other institutional investors. It was founded in 2018 by Wyatt after he was a trader at Starboard Value, a well-known activist hedge fund.

The letter said that since current CEO Jay Snowden was appointed in 2019, Penn has devoted some $4 billion in capital on various sports betting efforts to the detriment of its physical casinos, which the hedge fund sees as Penn’s undervalued asset. In recent years Penn has purchased and sold Barstool Sports, taking nearly a $1 billion loss, paid $2 billion for The Score, a Canadian sports betting firm that had less than $25 million revenue when acquired, and now has gone into a venture with ESPN Bet, a brand it licenses from Walt Disney Co.

“Unfortunately, after less than a year into pivoting its attention to ESPN Bet, there has been no improvement in the Company’s ability to execute in [its] Interactive [division],” the letter stated in part. “While we understand that ESPN Bet appears as the Company’s newest bright and shiny object that may very well have significant value under the right owners, we ask that the Board take a moment to reflect objectively on the past four years of execution, assess the shareholder capital that has been destroyed, and recognize that shareholders may simply be tired of continued gambling on uncertain outcomes,” Wyatt concluded in the six-page document.

Penn shares on the New York Stock Exchange jumped 20% Friday to $17.50 as Wall Street bet the letter would be a catalyst for change at Penn. In a little over three years, Penn stock has lost 85% of its value, hitting a four-year low of $13.50 earlier this month. Penn didn’t immediately respond to a request for comment.

“To shareholder detriment, Penn has not been able to demonstrate the management expertise necessary to build a business that could become a formidable competitor in the online sports betting oligopoly,” Wyatt’s letter stated.

While activist investors often can force management to make changes by acquiring a significant stake in a company, that may not be the case with Donerail. The company isn’t listed as a shareholder in Penn in SEC filings, although a fund could accumulate a fresh position over days or weeks before it has to disclose it to the SEC.

Donerail also hasn’t filed a form required of hedge funds with the SEC since 2020, suggesting it may have too few assets under management to be required to file as a hedge fund, or the company is structured as an entity not required to disclose its assets under management in a public filing. A search of regulatory filings shows Donerail manages about $36 million in a hedge fund for Harbert Fund Advisors, an $8 billion asset management arm of the Harbert family of Alabama. Donerail likely has other clients. Data compiled by Standard & Poor’s Capital IQ shows Donerail invested $245 million in PBA Tour owner Bowlero in 2021 as part of its going public through a SPAC. A phone call to Donerail seeking clarification wasn’t immediately returned.

Still, regardless of Donerail’s size, the forcing of a discussion of Penn’s strategy and the capital needed to succeed in sports betting is warranted, Jefferies & Co. analyst David Katz said in a note to clients Friday.

“Offering competitive product to capture meaningful share has required considerable investment from others, while the tolerance of the current shareholder base is limited, which suggests that something has to change one way or the other, in our view,” the note said.

Separately, shares of Caesars Entertainment jumped more than 11% Friday, after a report citing unnamed sources by Bloomberg News said another activist investor, Carl Icahn, has built a large position in the casino and mobile sports betting business.