The FTSE 100-listed Entain PLC (GB:ENT) soared yesterday after the U.S.-based Corvex Management revealed its 4.4% stake in the company. Corvex, a hedge fund management company founded by Keith Meister, emphasized that Entain was at a “critical juncture” and called for a turnaround. Entain share price traded up by 8.6% on Thursday, bringing a slight relief for investors. But the stock still remains 30% down so far in 2023.
Entain is a gaming and sports betting company that owns games such as Bwin, Ladbrokes, Partypoker, PartyCasino, and others.
Mounting Pressures
Entain is currently under a lot of pressure from activist investors for its falling share price, unsuccessful acquisitions, and declining revenues. The Corvex news came just a day after Entain’s CEO, Jette Nygaard-Andersen, resigned from the company amid ongoing pressure from activist investors and regulatory challenges.
According to the statement released by Corvex, it believes the CEO’s resignation was an important step. However, it believes that additional changes are required. It also stated that Entain’s recent performance falls short of expectations, and all available options should be explored to enhance its value. Entain could also gain from the positive involvement of Corvex, considering its wide experience in the sector.
With a 4.4% stake, Corvex is now placed among the top ten shareholders of Entain. This further intensifies the pressure on the chair, Barry Gibson, and interim CEO, Stella David, to explore various strategic options, including the possibility of selling the entire company or divesting certain assets.
Is Entain a Good Stock to Buy?
Post this announcement, analyst Estelle Weingrod from J.P. Morgan confirmed a Buy rating on the stock, predicting 40% growth.
On TipRanks, analysts hold a bullish view on ENT stock and have rated it as a Moderate Buy. This includes eleven Buys, two Holds, and one Sell recommendation. The Entain share price prediction is 1,232.92p, which is 34% higher than the current trading levels.
