Should Playtech be fearing the investment shark Jason Ader? According to The Times, the online casino software group is warily watching the activities of Ader who quietly bought over $100 million worth of stocks in Playtech via his hedge fund firm, SpringOwl Asset Management.
It is not so much the fact that so much stock was bought, but more the fact that it was Ader who led the purchase. He has a reputation in the financial market for buying large amounts of stock and then torpedoing himself into the boardroom to shake up the governance and improve performance.
Now the group is watching warily to see what the latest new shareholder has in store for Playtech governance. Last week, Ader confirmed that his investment firm had bought $100 million in equity. He is seen as a powerful activist and has proven in the past that when he is ready to fight for something, he will do so with a success rate that few have witnessed.
Ader was instrumental in creating a board room shakeup at International Game Technology in 2013. Two years later, after buying a majority stake in the bwin.party entity, Ader engineered the $1.6 billion sale of the company to GVC Holdings. He was largely responsible for persuading the board of Amaya (parent group of PokerStars) to cut ties with its former CEO, David Baazov, who is facing charges of securities fraud.
Ader has entered into the Playtech story at a good point of time, from his perspective. The company’s stocks have plunged by more than 50% since last November when Playtech issued a profit warning. While the group blamed a crackdown by the Malaysian government and a struggling Asian gambling market, it seems that Ader believes that Playtech’s leadership needs a shakeup. According to Ader, Playtech needs to “improve its reputation, governance and stock price.” He has issues with Playtech chairman, Alan Jackson’s annual salary increase worth tens of thousands of rands, and his opinion of Teddy Sagi, Playtech’s founder, “remains a negative.”
It remains to be seen how Ader’s entry into the company will affect Playtech, and whether these effects will be felt as far as South Africa.