Playtech, one of the most recognizable names in the iGaming and casino business, has seen its share value fall, occasioned by Teddy Sagi’s reported lack of interest in the company, which has been reportedly haunting the financial performance of the software studio for months now.
Jason, Teddy and Playtech – A Trio That Was Never Meant
Jason Ader, an activist investor in Playtech, has been one of the most vociferous critics of Teddy Sagi, one of the company’s founders. Mr. Ader has been adamant in his requests, citing financial evidence that Mr. Sagi’s involvement is detrimental to the company’s future.
After dropping his share to 4.8%, Mr. Sagi has not been very active in and around Playtech, preferring to lead his life from afar the buzz and commotion of the iGaming world. However, Mr. Ader’s continuous requests for the former to go have been catching up to Mr. Sagi.
Calling for his removal since at least October, Mr. Ader has been citing evidence from the raucous past of the founder and adding it to the events of the day, with Playtech’s shares performing unsatisfactory. Shareholder value seems to be bogged down by the fraught relationship between founder and company.
This in turn, Mr. Ader argued, could have a negative effect on the company’s future expansion in the United States, with the sector already seeing the first signs of a great opportunity ahead. However, this may not come to pass and Playtech would risk being outstripped by less prominent brands who will be able to monetize their expansion into the United States.
Sagi Makes Peace, Ader Wants More
Even after the reduction of the share down to 4.8%, Mr. Ader is not quite content. He claims that the founder is too closely involved with the company, making it difficult to cast Playtech in a fresh light. Ader has appealed to directors, asking them to address an agreement dated to 2012. Apparently, Ader will seek the termination of Sagi’s functions within the company, arguing that this is the only way for Playtech to re-start its growth.
To understand the sort of trouble Playtech could be in, the value of shares fell by 50%, following two separate profit warnings, putting the company on a very thin ice indeed. Ader became more closely involved with the company back in August, when he bolstered his overall share to 5% and argued that it would be high time for Playtech to take its reputation more seriously.
Amid the fear-mongering, Playtech has reported on multiple occasions that it’s well within its Q3 profit targets and it will continue to develop its portfolio and boost shareholder value. Mr. Ader has been busy, though, and he is known to initiate restructuring which often leads to more profound changes in companies he participates in.
He attempted something similar with bwin, trying to appoint four directors on the Board of Directors, but was met with opposition. Ader seems to be determined to evict Sagi from his position. Whether this will truly help the company is another matter altogether. He seems to think it would.