SCIENTIFIC GAMES SHARES TANK ON NEWS OF MANAGEMENT CHANGES (Update)
Fridays news that Gavin Isaacs is to step down as CEO triggers a shareholder reaction.
The announcement Friday that the respected Scientific Games CEO Gavin Isaacs has handed the reins over to former Norwegian Cruise Lines chief executive Kevin Sheehan had an unintended and immediate consequence…the groups share price dived 16 percent in Friday trading.
Analysts attributed the plunge to investor concerns that Sheehan, whilst an accomplished businessman, has no experience in the gambling business, but also to what some described as the "almost cult status" that Isaacs enjoys in the industry as a skilled and experienced chief executive.
In fact Isaacs is not leaving the group, but takes up a post as vice chairman of the board, supporting owner and chairman billionaire Ron Perelman. Nevertheless, it appears that there are shareholders worried about the prospect of the business continuing to prosper without his direct oversight.
The decline in share price to $8.53 Friday was the biggest intraday loss experienced by the company since last November and followed the same-day posting of results that included quarterly revenue above expectations at $729.2 million and operating income up at $46.7 million compared to a loss of $800,000 in the corresponding quarter a year ago.