Enthusiast Gaming’s Biggest Shareholder Says CEO Created ‘Culture of Division’, Calls to ‘Upgrade’ Company
The largest shareholder of Enthusiast Gaming, the holding company of Luminosity, the Vancouver Titans and the Seattle Surge, has written an open letter to the company in which it calls for the removal of Enthusiast’s CEO and most of its board from ‘administration.
Greywood Investments and its partners and affiliates, which own 9.3% of Enthusiast, today created a website called “Upgrade EGLX”, referencing the company’s ticker symbol on the Toronto Stock Exchange and Nasdaq, and published a letter addressed to Enthusiast and its seven-person Board of Directors. In the letter, Greywood said that “under the current leadership, [Enthusiast’s] potential is wasted.
Specifically, Greywood called for the ousting of CEO Adrian Montgomery, which Greywood called “detrimental to the company’s management, operations, communications and growth strategies.” Greywood also claimed Montgomery developed a “divisional culture” in the workplace, failed to consult with various employees and shareholders about partnerships and acquisitions, and was overcompensated.
Shareholders have also targeted the company’s board of directors, which includes the likes of NFL player Richard Sherman and Vancouver Canucks president Francesco Aquilini. Among its main complaints is the board’s perceived “lack of economic interest” in Enthusiast, whose board members collectively own 5.7% of the company’s common stock.
In addition to overseeing Montgomery’s supposedly divisive work culture, Greywood chastised the board for its lack of transparency and “alleged improprieties.”
“We believe that the Board failed to provide appropriate oversight or management of certain conflict situations or reported incidents,” Greywood said. “This raises serious questions about the judgment of the Council, which we believe has unwittingly fostered what we understand to be an unhealthy and harmful culture. We believe this has caused the company significant challenges in recruiting and retaining appropriate people in leadership roles (particularly women).
In the wake of this and other complaints, Greywood will focus its campaign to “upgrade” Enthusiast on replacing most board members with those with more industry knowledge or financial involvement. in the business. Additionally, shareholders want Montgomery replaced immediately and the company operating more in America’s “gaming/tech/capital hubs,” such as Los Angeles and New York.
In March, Enthusiast laid off most of its editorial staff at Upcomer amid a pivot to video. The move came just over a year after Enthusiast launched the esports publication. Later that month, Enthusiast reported a loss of $41.6 million in 2021, nearly double the losses reported in 2020.