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Hindsight is a wonderful thing – except for Entain

Entain is swimming in turbulent waters according to Sky News scoop specialist Mark Kleinman, who wrote about the operator in his fortnightly column for City AM.

Kleinman points out that three years earlier, Entain had confidently turned down a lucrative takeover proposal from US joint venture partner MGM Resorts.

However, shareholders now doubt the wisdom of that decision as the company’s fortunes appear to be on the wane.

Adding to recent woes, a whopping £585m was earmarked by Entain’s board for a hefty potential fine in the UK over bribery allegations related to its legacy business in Turkey.

And the challenges don’t end there. The company shocked stakeholders with a concerning Q3 2023 forecast, predicting a decline in online gaming revenue for the period.

This revelation was felt on the stock market and caused a dent in Entain’s share price, culminating in a 14% dip over the last 12 months.

To rub salt in the wounds, shares of major rival Flutter Entertainment have surged by more than a third over the same timeframe.

The company’s leadership is now under pressure, writes Kleinman, with particular attention on CEO Jette Nygaard-Andersen.

Speculation is rife, with sources indicating that shareholders are closely inspecting Entain’s strategic direction, further intensifying scrutiny initiated by activist fund Eminence Capital.

Entain rejected MGM’s 2021 bid, which was equivalent to roughly £8bn. That decision looms large in hindsight, with that premium almost 95% more valuable than today’s stock.

A cautionary crypto tale

In a tale of caution for anyone banking on crypto, a senior manager at a UK investment firm found himself £300,000 poorer after falling victim to a cryptocurrency trading scam.

Matthew Thomas* (not his real name) might manage money for a living, but he was “blinded by greed, curiosity, and stubbornness” when he fell for the scam that played out over half a year.

In a story told by The Guardian this week, an acquaintance introduced Thomas to a seemingly legitimate US-based crypto trading app.

He began trading, and sure enough, the profits rolled in on a daily basis.

Soon, Thomas qualified for a crypto “airdrop”, a marketing strategy offering a chance to access bonus coins. But the catch? He had to maintain a hefty balance on the app.

Despite growing suspicions, the allure of big returns kept Thomas interested. But as his investment grew, so did the stakes.

Thomas borrowed £60,000 against his own mortgage and even loaned £20,000 from his employer when the scammers demanded more money.

Scammers moved money directly from his bank account, with one “airdrop” ploy leading to another.

Eventually, after depositing more money in a bid to unfreeze his funds, Thomas knew the game was up.

He eventually reported the scam to various authorities, including the FBI in the US and the National Crime Agency in the UK.

A no-nonsense statement from the Financial Conduct Authority won’t have provided much consolidation for Matthew:

“We continue to remind people that purchasing crypto assets remains high-risk and that they should be prepared to lose all their money.”

Disney dives into sports betting – but at what cost?

Disney is making a high-stakes gamble on sports betting, according to a near-2,000 word long-read in The Wall Street Journal this week.

A company that once hesitated to touch the world of gambling recently penned a 10-year deal with Penn Entertainment to launch an ESPN-branded sportsbook in the US market.

This strategy hasn’t gone without its critics. Some Disney insiders are against the play, worried that the likes of Elsa and Donald Duck will be tarnished by association. Only a year ago, one major investor hinted they might bail if Disney cozied up to the betting industry.

But for the powers that be, including ESPN’s Jimmy Pitaro and Disney’s Bob Iger, the allure of attracting younger sports fans and a ginormous $1.5bn fee from Penn proved irresistible.

With online sports gambling raking in $7.6bn last year and projections hitting $11.8bn for next, would Disney regret ignoring its piece of the pie?

The problem remains that Disney’s fairy-tale reputation could be in for a twist.

The WSJ article reveals concerns from Disney stakeholders including chief of corporate social responsibility Jenny Cohen and investment behemoth BlackRock.

Readers are strongly advised to seek out the piece in their own time. It is worth it for the artwork alone!

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