Entain PLC (LSE:ENT) parting ways with its latest chief executive today will bring about the bookmaker's sixth boss in less than a decade, extending the Ladbrokes, Coral and Sportingbet owner's hapless run in recent years.
It has been hit by an HMRC probe into bribery at its legacy Turkish business, since concluded, but last month accountant KPMG was hit with a probe by the Financial Reporting Council into its audit of the bookmaker’s 2022 numbers.
Since rebuffing takeover offers from US casino giants MGM Resorts and rival DraftKings in 2021, shares in the FTSE 100 bookmaker have fallen around 70%, with a four-and-a-half-year low below £5 reached last summer.
Having climbed back up to around 750 lately, today the shares were sent tumbling over 10% to 665p, as latest CEO Gavin Isaacs was revealed to be stepping down just five months into the job, with the decision said to have been made "by mutual agreement".
Stella David, the board chair, will resume the role of interim CEO that she held for most of last year until a replacement is found.
Revolving door
David first took the reins in December 2023, when Entain parted ways with Jette Nygaard-Andersen, who like David had been a non-executive on the board before taking the CEO role and lasting three years.
Nygaard-Andersen took the role after a similarly short-lived appointment to Isaas, where Shay Segev, the much-vaunted successor to long-running boss Kenny Alexander took over in July 2020 and then resigned only seven months later to take up a different job.
What is it about Entain that makes these men so uncomfortable in the hot seat?
The departure of Nygaard-Andersen came amidst pressure from a group of New York-based hedge funds, all looking to exert some activist pressure on the board - perhaps to try and reignite talks with potential buyers.
One of these activists, Corvex Capital, also has a board seat at MGM International, Entain's 50-50 partner on US online gambling brand BetMGM.
Another, Eminence Capital, was given a non-executive director seat on the Entain board, also joining the board's hiring committee early last year, following the writing of an open letter where they promised to "make its voice heard in an effort to ensure Entain’s board and management do not make any further value destructive decisions".
What has gone wrong?
Before the news on Isaacs emerged, analysts at Berenberg issued a note saying Entain was their "top pick in the leisure space" based on the US joint venture turning a corner toward profitability and looking "undervalued" in the context of Entain’s current share price, suggesting that the market should start to gain confidence in the company.
That took a sizeable dent with the CEO's departure.
“Something must have gone seriously wrong for Entain’s chief executive Gavin Isaacs to leave after just 161 days in the job," said analysts at AJ Bell.
With the bookmaker saying that trading remained in line with expectations, they speculated that Isaacs perhaps "didn’t fit with the culture of Entain or that he didn’t see eye to eye on strategy".
They added that the lack of a permanent boss "makes the group vulnerable if a rival betting group or private equity outfit came sniffing around for takeover opportunities".