When we first started tracking C-suite transitions on InsideArbitrage, little did I realize that instead of being the exception, sudden departures would be relatively common. I was surprised that we had 11 sudden executive departures in each of the two prior weeks but the frequency went up even more last week with 14 executives suddenly calling it quits. In one instance, the company laid off 80% of its workforce, including the CFO.
This week we decided to focus on the casino and online gambling operator Bally’s Corporation (BALY), not only because the CFO decided to leave just a little over a year after taking the role but also because the CEO left at the end of March. When I look at the company, two words come to mind: capital mismanagement. A misguided stock buyback program and a string of acquisitions left the company with a highly leveraged balance sheet.
Bally’s also refused a generous $38 per share offer from Standard General last May. The company had been reporting a string of losses and some of those losses were likely the result of write-offs related to ill-advised acquisitions.
Welcome to edition 40 of C-Suite Transitions, a weekly series on InsideArbitrage that tracks appointments and departures at publicly traded companies during the prior week. We highlight five appointments and departures each week by picking the largest companies from the full list of management changes.
Sudden Departures
Formerly known as Twin River Worldwide Holdings, Bally’s Corporation (BALY) owns and manages several casinos, hotels, and racetrack properties across the United States. It also owns Bally’s Interactive International, previously Gamesys Group, a worldwide online gambling operator, Bally Bet, a sports betting platform, and Bally Casino, a iCasino platform. The company operates in three segments: Casinos & Resorts, North America Interactive, and International Interactive.
Executive Changes
On May 9, 2023, Bally’s Corporation announced that Bobby Lavan, Bally’s current Chief Financial Officer, will be leaving the company to pursue another opportunity and Marcus Glover has been appointed as Bally’s Executive Vice President and Chief Financial Officer.
Bobby Lavan
In April 2022, Mr. Lavan became Executive Vice President and Chief Financial Officer. He had served as Bally’s Senior Vice President of Finance & Investor Relations since May 2021.
Mr. Lavan is leaving Bally’s to join the bowling alley operator Bowlero (BOWL) that went public through a SPAC merger in December 2021.
Marcus Glover
Mr. Glover’s most recent position was Chief Strategy Officer for QPSI LLC, a supply chain solutions and contract packaging business. Mr. Glover was also a senior executive with Caesars Entertainment in various positions.
Marcus Glover, Bally’s incoming EVP, and CFO, said, “I am eager and honored to join the Bally’s team at such a transformative time for the Company. I look forward to working alongside an outstanding and smart group of leaders to advance the Company’s strategic goals, execute the strategic direction, implement operational efficiency and integration globally, and develop and invest in talent and innovation to best position the Company for continued growth and success.”
On February 13, 2023, Bally’s Corporation (BALY) announced that Lee Fenton, Chief Executive Officer, will step down and Robeson Reeves, President – Interactive, will take over as Chief Executive Officer, effective March 31, 2023.
Robeson Reeves formerly served as President of Bally’s Interactive since October 1, 2021.
Mr. Reeves joined Gamesys in September 2005 and has held a variety of jobs, most recently serving as Chief Operating Officer since July 2015.
Lee Fenton
After less than 18 months in the top position, Lee Fenton left the company as Bally’s Chief Executive Officer. Mr. Fenton also left the Board of Directors.
Following the acquisition of Gamesys Group, where he had served as CEO since 2015, Mr. Fenton was appointed CEO of Bally’s on October 1, 2021.
George Papanier was also recently appointed President of Bally’s.
Mr. Papanier has served as Bally’s land-based casino business, on October 1, 2021. His involvement with Bally’s started in 2004 when he was appointed Chief Operating Officer. He kept his role until February 2011 when he was promoted to President and CEO, a position he retained until September 2021.
Standard General Offer
In January 2022, Standard General delivered a non-binding letter to the board of directors of Bally’s Corporation (BALY) proposing a transaction under which it would acquire all of the outstanding shares of common stock not currently owned by Standard General at a price of $38 per share. Bally’s would have been valued at $2.07 billion as a result. Last May, Bally’s Corporation (BALY) announced that a special committee of its board of directors had terminated consideration of Standard General’s proposal. Bally’s currently trades at $15.65, a fraction of Standard General’s $38 per share acquisition price.
Bally’s Acquisition Spree
In 2020 Bally’s acquired Bet.Works in a deal worth up to $125M. In 2021 Bally’s acquired daily fantasy sports app Monkey Knight Fight in a deal worth up to $90M in stock. In March 2023 Bally’s shut down Monkey Knife Fight and decided to move on from Bet.Works. The company took a $390.7 million non-cash impairment to write off these acquisitions.
In 2021 Bally’s also announced that it has acquired Telescope. Later in the year, the acquisition spree continued as Bally’s completed its £2 billion ($2.69 billion) merger with Gamesys.
In 2022 Bally’s, GLPI and PENN completed a transaction related to the acquisition of the non-land assets of the Tropicana Las Vegas for a cash purchase price of $148 million, payable to GLPI.
Valuation
Bally’s Stock is down 32% percent over the last year. The company has a market cap of $709.70M and an enterprise value of $5.02B on account of $3.27B of net debt at the end of 2022 and an additional $1 billion in capital leases. The company trades at an EV/EBITDA of 10.10.
The company’s acquisition spree helped revenue increase from $418.39M in fiscal year 2018 to $2.31B, an increase of 455.94%.
Q1 2023 revenue of $598.7 million increased 9.2% year-over-year
Interactive Results Were ‘Unacceptable’
Bally’s yearly numbers for its US-facing online division indicated a loss that is over ten times greater than the $36.9 million it lost in 2021. When the company released its preliminary results for 2022, it disclosed a net loss of $428 million throughout the North American interactive segment in 2022.
Mr. Reeves made an open comment about the company’s preliminary fourth quarter and full-year 2022 report, saying: “Simply put, our North America Interactive results in 2022 were unacceptable.”
Capital Return Program
During the first quarter of 2023, Bally repurchased 1 million shares of its common stock for an aggregate purchase price of $19.8 million. Bally’s currently has $174.8 million available for use under its capital return program.
First Quarter 2023 Results
Appointments
1. Baxter International (BAX): $43.84
Brian C. Stevens, the company’s Senior Vice President, Chief Accounting Officer, and Controller, will assume the role of interim CFO effective as of May 31, 2023, and also continue to serve in his current role while the company undertakes an executive search process for a permanent CFO.
MarketCap: $22.18B | Avg. Daily Volume (30 days): 6,002,273 | Revenue (TTM): $15.06B |
Net Income Margin (TTM): -16.34% | ROE (TTM): -32.52% | Net Debt: $15.22B |
P/E: -8.99 | Forward P/E: 16.56 | EV/EBIDTA (TTM): 12.11 |
P/S (TTM): 1.60 | P/B (TTM): 4.10 | 52 Week Range: $37.35 – $75.46 |
2. DigitalOcean Holdings (DOCN): $32.60
On May 3, 2023, DigitalOcean Holdings announced that W. Matthew Steinfort, the company’s Chief Financial Officer, was appointed as interim Chief Accounting Officer.
Mr. Steinfort has served as the company’s Chief Financial Officer since January 2023.
MarketCap: $2.90B | Avg. Daily Volume (30 days): 1,641,063 | Revenue (TTM): $614.13M |
Net Income Margin (TTM): -6.62% | ROE (TTM): -38.68% | Net Debt: $1.66B |
P/E: -77.03 | Forward P/E: 22.12 | EV/EBIDTA (TTM): 49.09 |
P/S (TTM): 6.36 | P/B (TTM): 69.04 | 52 Week Range: $23.38 – $53.88 |
3. Hamilton Lane (HLNE): $66.40
On May 5, 2023, Hamilton Lane Incorporated appointed Andrea Anigati Kramer as Chief Operating Officer, effective May 8, 2023.
Ms. Kramer joined Hamilton Lane Advisors, L.L.C. in February 2005 and has served as a Managing Director of HLA since 2010.
MarketCap: $3.68B | Avg. Daily Volume (30 days): 165,167 | Revenue (TTM): $516.87M |
Net Income Margin (TTM): 17.77% | ROE (TTM): 27.32% | Net Debt: N/A |
P/E: 25.68 | Forward P/E: 18.15 | EV/EBIDTA (TTM): 11.64 |
P/S (TTM): 7.45 | P/B (TTM): 6.99 | 52 Week Range: $55.16 – $80.73 |
4. Fastenal (FAST): $54.59
On May 3, 2023, the Board of Directors of Fastenal Company announced Terry M. Owen will transition to the newly established executive officer position of Chief Operating Officer.
MarketCap: $31.17B | Avg. Daily Volume (30 days): 3,470,878 | Revenue (TTM): $7.14B |
Net Income Margin (TTM): 15.59% | ROE (TTM): 34.69% | Net Debt: $408.3M |
P/E: 28.14 | Forward P/E: 27.47 | EV/EBIDTA (TTM): 18.95 |
P/S (TTM): 4.37 | P/B (TTM): 9.49 | 52 Week Range: $42.58 – $55.24 |
5. Avista Corp.(AVA): $44.44
On May 1, 2023, the company’s board of directors appointed Kevin Christie as Chief Financial Officer, Treasurer, and Senior Vice President Regulatory Affairs, effective May 11, 2023.
MarketCap: $3.37B | Avg. Daily Volume (30 days): 406,402 | Revenue (TTM): $1.72B |
Net Income Margin (TTM): 8.04% | ROE (TTM): 6.00% | Net Debt: $2.96B |
P/E: 23.70 | Forward P/E: 18.35 | EV/EBIDTA (TTM): 14.24 |
P/S (TTM): 1.87 | P/B (TTM): 1.41 | 52 Week Range: $34.91 – $45.13 |
1. Clarivate (CLVT): $8.06
On May 9, 2023, Clarivate announced that Steen Lomholt-Thomsen, Chief Revenue Officer of Clarivate will depart from his position, effective July 1, 2023.
MarketCap: $5.45B | Avg. Daily Volume (30 days): 6,329,134 | Revenue (TTM): $2.63B |
Net Income Margin (TTM): -151.76% | ROE (TTM): -42.70% | Net Debt: $3.28B |
P/E: -1.30 | Forward P/E: 11.98 | EV/EBIDTA (TTM): 11.69 |
P/S (TTM): 2.35 | P/B (TTM): 1.15 | 52 Week Range: $7.39 – $15.11 |
2. Baxter International (BAX): $43.84
On May 4, 2023, James K. Saccaro notified the company of his decision to resign as Executive Vice President and Chief Financial Officer, effective as of May 31, 2023, to join a company in the healthcare industry.
Mr. Saccaro will leave Baxter at the end of May after 21 cumulative years with the company, including the past eight as CFO, to join a company in the healthcare industry.
MarketCap: $22.18B | Avg. Daily Volume (30 days): 6,002,273 | Revenue (TTM): $15.06B |
Net Income Margin (TTM): -16.34% | ROE (TTM): -32.52% | Net Debt: $15.22B |
P/E: -8.99 | Forward P/E: 16.56 | EV/EBIDTA (TTM): 12.11 |
P/S (TTM): 1.60 | P/B (TTM): 4.10 | 52 Week Range: $37.35 – $75.46 |
3. Insulet Corporation (PODD): $322.85
Insulet Corporation announced that Bret Christensen, Executive Vice President, Chief Commercial Officer of the Company will be leaving the company, effective May 5, 2023, in connection with an internal reorganization pursuant to which his position is being eliminated.
MarketCap: $22.50B | Avg. Daily Volume (30 days): 520,960 | Revenue (TTM): $1.37B |
Net Income Margin (TTM): 0.04% | ROE (TTM): 0.13% | Net Debt: $779.3M |
P/E: N/A | Forward P/E: 263.16 | EV/EBIDTA (TTM): 197.77 |
P/S (TTM): 16.82 | P/B (TTM): 45.57 | 52 Week Range: $181 – $335.91 |
4. Cerevel Therapeutics (CERE): $31.98
On May 3, 2023, the company announced that N. Anthony Coles will transition from his role as Chief Executive Officer of the company, effective as of June 12, 2023. Dr. Coles will continue to serve as the chairperson of the company’s board of directors.
MarketCap: $5.02B | Avg. Daily Volume (30 days): 654,922 | Revenue (TTM): N/A |
Net Income Margin (TTM): N/A | ROE (TTM): -81.31% | Net Cash: $388.28M |
P/E: -12.66 | Forward P/E: N/A | EV/EBIDTA (TTM): -11.78 |
P/S (TTM): N/A | P/B (TTM): 9.60 | 52 Week Range: $19.86 – $41.46 |
5. Chewy (CHWY): $34
On May 2, 2023, Susan Helfrick, General Counsel and Secretary of Chewy notified the company of her decision to retire from her position effective as of June 20, 2023.
MarketCap: $14.52B | Avg. Daily Volume (30 days): 3,537,333 | Revenue (TTM): $10.10B |
Net Income Margin (TTM): 0.49% | ROE (TTM): 43.06% | Net Cash: $178.01 |
P/E: 291.67 | Forward P/E: N/A | EV/EBIDTA (TTM): 122.91 |
P/S (TTM): 1.40 | P/B (TTM): 66.09 | 52 Week Range: $22.22 – $52.88 |
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