Industry powerhouse Entain is facing mounting pressure from activist investors, who are raising serious doubts about the company’s financial decision-making and the capabilities of CEO Jette Nygaard-Andersen.

In June, investment firm Eminence Capital sent an open letter criticizing Entain’s £750m ($941.3m) acquisition of STS Holdings, along with other deals made throughout 2023. They accused the company of making acquisitions with undervalued equity, which they believe is detrimental to shareholder value.

Now, joining Eminence Capital, Sachem Head Capital Management and Dendur Capital have also criticized Entain’s performance and have taken positions within the company.

Interestingly, this backlash has had a more significant impact on Entain’s share price than when its own Board members bought shares earlier this month. The share price has increased from £8.16 to around £8.76 today.

Although Entain has not reported any financial losses or a decline in gaming revenue, there has been a notable slowdown in growth. In Q3 2023, the net gaming revenue (NGR) increased by only 7%, compared to the 15% growth seen in Q1 2023.

Furthermore, an analysis of the stock prices shows a significant dip in the third quarter. At the moment, Entain’s stock sits at £8.68, a considerable drop from the year-to-date high of £15.88 in February.

When approached for comment, Entain stated that they are actively engaging with shareholders and addressing any concerns. They emphasized their clear plan to drive sustainable organic growth, increase margins, and capitalize on opportunities in the US market, expressing confidence in their ability to deliver long-term value for shareholders.

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