Activist Investor Jason Ader Plans to Shake Up Playtech

Posted on: September 3, 2018, 05:00h. 

Last updated on: September 3, 2018, 03:54h.

Activist investor Jason Ader has his sights set on online gambling software giant Playtech. The former Las Vegas Sands (LVS) director has a reputation for investing big in gaming companies before unleashing a wrecking ball into their boardrooms.

Jason Ader
In Playtech, activist investor Jason Ader smells an undervalued company that needs a shot in the arm. The man who helped build LVS into the biggest gaming company in the world can make stock jump just by thinking about it, but expect sparks to fly. (Image: WSJ)

On Monday, The Times revealed Ader had quietly purchased a $100 million-plus stake in the London-based company through his hedge fund firm, SpringOwl Asset Management.

A former Wall Street analyst, Ader was instrumental, with LVS, in opening up Macau’s gaming market in the 1990s and 2000s, which grew to be the biggest in the world, making LVS the biggest gaming company in the world in the process.

Ader, Corporate Raider

Through SpringOwl, Ader specializes in targeting underperforming public companies, then applying pressure to effect changes in corporate structure and governance in order to improve performance and increase value for himself and his clients.

In 2013, Ader waged a battle for a board room shake-up at International Game Technology. A year later, his newly formed SpringOwl acquired the majority stake in and engineered its $1.6 billion sale to GVC Holdings in 2015.

As a shareholder in PokerStars parent Amaya, now The Stars Group, he was instrumental in publicly persuading the board to sever ties to its founder, former chairman and CEO David Baazov, who was accused, but not convicted, of securities fraud.

On Friday, Ader confirmed to The Times that SpringOwl had bought over $100 million in equity over the past few weeks.

Playtech Wobbles

In June 2017, Playtech’s shares were at an all-time high. The company had a market cap of around $4.6 billion and was targeting a position on the FTSE 100 index.

But last November, the board was forced to issue a profit warning due to a sudden slowdown in growth, which it largely attributed to an online gambling crackdown by the Malaysian government that decimated its client base one of its primary Asian markets.

Playtech’s stock has plunged by more than 50 percent since and the board faced a shareholder revolt at its AGM earlier in the summer. Last week it reported a slump in its underlying half-year profits, which it blamed on fierce competition in China.

A gaming giant with potentially undervalued stock and allegedly shaky corporate governance ticks all the boxes for Ader, who is believed to have concerns over chairman Alan Jackson’s continued tenure.

Ader told The Times Playtech needed to “improve its reputation, governance and stock price” and was looking forward to “continuing a dialogue” with the board.