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After last week’s blockbuster announcement that their Chief Executive Officer and five other men would be charged with insider trading, Amaya Gaming now has to deal with the fact that one of the top stock watchers in the industry has downgraded the outlook on their stock.

Once it was announced that David Baazov, the now-former Chief Executive Officer of Amaya Gaming who has taken a paid “leave of absence” from the company, was facing charges of insider trading in dealings with Amaya Gaming from Quebec’s Autorité des Marchés Financiers (AMF), Moody’s Investors Service moved their outlook on Amaya, Inc. and Amaya B.V. and their related assets to “negative.” The AMF is Canada’s version of the United States’ Securities and Exchange Commission (SEC), the federal organization that is charged with ensuring that there is no wrongdoing on the different stock exchanges in the United States.

In announcing that they were moving their outlook to “negative,” Moody’s offered a thorough reasoning for the decision. “The negative outlook considers Moody’s perception of increased credit risk for Amaya,” the statement began. “Moody’s believes these civil charges, along with the legal process that follows, could negatively affect the execution of the company’s operations and growth strategies, particularly given that Mr. Baazov is significantly involved in the development and execution of Amaya’s business strategies. Additionally, the negative outlook also considers the uncertainty with respect to how the regulators will react to any subsequent disclosure regarding the insider trading charges.”

In essence, this is why Baazov “decided” to take a paid “leave of absence” earlier this week. While there may be some truth to the statements that he was looking to prepare to defend himself against the charges that have been brought against him, Amaya could not continue to have him at the helm of the company for the exact impression that Moody’s presented. The additional idea that Baazov is still looking into a purchase of Amaya Gaming – something that was floated at the start of February – may still be on the table, but it looks very unlikely unless Baazov is found to be not guilty of the charges.

The saga for Amaya Gaming – and the potential groundwork for the insider trading charges against Baazov and his cohorts – stems back to the purchase of PokerStars and Full Tilt Poker from the Rational Group and the Scheinberg Family in 2014. In April 2014, Amaya stock was running around $5.85 on the Toronto Stock Exchange but, as soon as rumors began to emerge that Amaya was looking to make a deal for the world’s largest online poker room, the stock price rapidly increased. By the end of April, the stock price had climbed to $6.88 and the best was yet to come.

May 2014 would see the price jump from $7.13 to $10.82, a more than 50% increase in just a month’s time. When the deal between Amaya Gaming and Rational for PokerStars and Full Tilt Poker was actually announced in June 2014, the stock price would almost triple to $30 by the end of the month. The price for Amaya stock would peak at $38.43 in November 2014 and has been on a rollercoaster since that time.

In December 2014, the AMF launched their investigation into the insider trading accusations against Baazov and five other men intricately linked with the Amaya/Rational deal. The stock price plunged to $27.10 by January 2015, but it would gradually fight back through the year. On November 9, 2015, the stock was trading at $31.23 but, following a less-than-optimistic financial forecast, the stock price plummeted to $19.59. As of this morning, Amaya Gaming stock is trading at $16.70, slightly down from its price of $16.98 at the close of trading on Tuesday.

Whether the “leave of absence” that Baazov has taken will have an effect on the stock for Amaya Gaming, it will certainly have an effect on the boardroom. Whether Baazov returns entirely depends on the results of any trial – or potential plea bargain – that is decided in the case.

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