In a press release on Friday morning, the powerhouse online gaming company Amaya Gaming – the owners of PokerStars, among other things – released their pertinent financial data for the second quarter of 2016. At the same time, the company quietly announced a change at the top of the company, removing the ‘interim’ title from the man who took over for their previously embattled leader.
The second quarter of 2016, which ended on June 30, saw tremendous increases in Amaya’s overall performance. For 2016, Amaya reported that total revenues were $285.9 million, a 10.2% raise over their performance during the same time period in 2015 ($259.5 million). Adjusted net earnings for the same year-to-year comparison showed that there was a 24.5% increase ($89.7 million versus $72 million) and that there was a whopping 262.9% increase in continuing operations earnings ($22.4 million in 2016, $6.382 million in 2015).
So what caused the increases during the second quarter? Possibly the Spring Championship of Online Poker (SCOOP), which brought in a total prize pool for the tournament schedule of $91 million and broke previous records. Amaya analysts also cited the closure of Full Tilt Poker and the migration of players from that site into the PokerStars fold had an effect on the bottom line. Finally, the continuous success of PokerStars in New Jersey, where they have been able to garner 44% of the market share, has been a key highlight for the company.
The big story that was buried during the financial announcements was the naming of a new Chief Executive Officer for Amaya Gaming. Prior to the financial announcements, interim CEO Rafi Ashkenazi added the leadership of Amaya Gaming to his already busy schedule as the CEO of Rational Group. When he was appointed as the interim CEO in March 2016, it was expected that he would only be a placeholder until David Baazov, the CEO of Amaya who was charged with insider trading in Canada, could clear his name. It now appears that the company is ready to move on without Baazov.
The announcement on Friday officially removed the ‘interim’ title from Ashkenazi, making him the boss of the largest online gaming company in the industry. Baazov, rather than fighting the dismissal by Amaya, instead tendered his resignation from any and all positions with the company (including, it is assumed, his position on potentially and Boards for the company) effective on Thursday. Although Amaya released no statement from Ashkenazi, Baazov was quoted by the company as saying, “I am proud of my contributions in building Amaya into the successful company it is today and continue to be supportive of its strategy and management.”
For its part, Amaya included in the announcement the statement that they “thank(ed) Mr. Baazov for his contributions to Amaya since its inception and through its rapid growth” while “looking forward to Mr. Ashkenazi’s continued success in leader the execution of Amaya’s strategy.”
In March, Baazov was charged along with two other individuals and three other companies with insider trading by Canada’s watchdog agency for financial trading, the Autorite des Marches Financiers. The AMF stated that Baazov faced allegations of “aiding with trades while in possession of privileged information” and rode a stratospheric rise in the stock price of Amaya Gaming prior to its purchase of PokerStars. Baazov at the time stated that “these allegations are false and I intend to vigorously contest these allegations.”
Something seems to have changed in the case since those charges were announced in March, however. Baazov initially vowed to stay on as the head of Amaya Gaming through the fray but, in late March, took an “indefinite leave of absence” from his position as CEO of the company to concentrate on the charges he faced. Ashkenazi took over at that point and now takes over permanently as Baazov moves on, with the insider trading case still hanging over his head.
The naming of Ashkenazi as the permanent CEO and the glowing financial report didn’t seem to have an effect on the stock of the company. Amaya Gaming closed slightly down on the NASDAQ in New York, down 1% from $16.30 to $16,13 at the close of business on Friday, while trading on the Toronto Stock Exchange saw Amaya close down 1.42% from $21.17 to $20.87.
