Enthusiast Gaming's largest shareholder lobbies for CEO to be removed

Greywood, the largest shareholder in Canadian gaming and media holding company Enthusiast Gaming, has called for the CEO to be removed.

The letter: Greywood has penned an open letter to air its frustrations with the company.

• In a letter published on May 24, Greywood announced its intentions to launch the 'Upgrade Enthusiast' campaign in order to gain the attention of Enthusiast management and realise change.
• Greywood believes that Enthusiast CEO Adrian Montgomery is a "detriment to the Company’s management, operations, communications, and growth strategies" and that the company is "failing to realize its potential under his leadership."
• The shareholder believes that some of the company's directors don't have the required "industry knowledge, experience and willingness" to recognise and rectify the issues that it believes have developed under current management.
• It states that Enthusiast's board members only owning 5.7% of the company's shares is a sign that they have a lack of interest in the company's financial state. Greywood also notes that it believes the directors are unaware of the work atmosphere under Montgomery, deals are being made without "appropriate contemplating or deliberation," there's a lack of transparency between the board and the shareholders, and Montgomery is overcompensated financially.

The solution? While Enthusiast Gaming has made some serious investments, Greywood evidently doesn't feel like that's enough.

• The shareholder is calling for a CEO "whose qualifications and track record are above reproach" and is a "respected veteran leader" in gaming or media.
• Greywood is launching a campaign named 'Upgrade Enthusiast' in an effort to spread its message to other shareholders, having already "tried in vain to engage with the Board" only to receive a "generic, disingenuous and dismissive email."
• The campaign's aims are to replace the majority of the board of directors, remove Montgomery as CEO and find a suitable replacement, utilize the company's "unique strengths in data science, technology and development" to expand wider and faster, and position the company as a leader in gaming, esports, and media.

Recommended reading → How esports organizations performed financially in 2021

The financials: While company performance shouldn't be wholly tied to financial results, Enthusiast has lost a lot of money in recent times.

• The Canadian holding company's 2021 financial results included total revenue of $133.8M ($167.4M CAD) and a net loss of $41.6M ($52M CAD).
• More recently, Enthusiast shared its financials for the first quarter of 2022. It generated revenue of $37M ($47.2M CAD), an increase of 57% when compared to the same period in 2021, and made a net loss of -$8.6M (-$11M CAD).
• It counts renewals and expansions of deals with the likes of the U.S. Navy, HBO Max, and DoorDash as highlights and reported that its content received 11.3B views in the first three months of the year.