Investor: Playtech Should Stick to Online Gambling
Recently we reported how SpringOwl Asset Management, under the leadership of Jason Ader, bought $100 million worth of stocks in the online gaming software group Playtech. It seems now that Ader has wasted no time in giving his opinion on how Playtech should be run. Ader recently told Playtech leadership that the group should sell off its various financial services businesses and instead focus on what it does best – online gambling.
Playtech has already proven its success in the online gambling world, and provides software to excellent online casinos such as Casino Las Vegas and Winner Casino.
The group has already started heeding Ader’s suggestions and sold its 10% stake in the retail online trading platform, Plus 500, last week.
Speaking to Reuters, Jason Ader spoke about his vision for Playtech and said: “We’re not advocating any fire sale or any rushed transaction, but over time we would like to see Playtech in the gaming business, and not have the distraction of other financial services holdings.”
Ader also said that Playtech and its businesses and assets are worth significantly more than where the stock is trading at the moment.
Over the past year, Playtech’s stock has fallen over 26%. Two profit warnings have been issued this year, mainly due to poor growth in the Asian market. SpringOwl Asset Management believes that Playtech should be doing all it can to create a turnaround of its fortune, and that means shedding its financial services business which make up nearly 11% of the company.
There also seems to be ongoing tension between SpringOwl and Playtech founder, Teddy Sagi, who currently owns a 6.2% stake in the online gambling company.
Ader told Reuters that the asset management company had tried directly and indirectly to contact Sagi several times over the past few months but he has not responded. Ader minced no words when asked whether he wanted to see Sagi out of the company as a shareholder.
“I don’t have a sense that the future of this company includes Teddy Sagi,” he said.