Enthusiast Gaming takes on the CEO and board challenge of investment firm Greywood

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Greywood Investments, an investment firm with a significant stake in publicly traded esports and gaming media company Enthusiast Gaming, announced a campaign on Tuesday to replace Enthusiast’s CEO and board members.

Toronto-based Enthusiast Gaming owns a number of gaming-focused publications and brands, including Destructoid, Upcomer, and Addicting Games. The esports organization Luminosity Gaming, which has rosters in the Overwatch and Call of Duty esports leagues as well as “Valorant,” is also a subsidiary of Enthusiast. On its website, the company boasts of reaching an audience of over 300 million gamers every month. The company’s stock price fell below $2 on Tuesday.

In a letter to Enthusiast’s board of directors, which includes NFL cornerback Richard Sherman, Greywood representatives expressed disappointment with the company’s declining fortunes.

“The frustrating part for shareholders is that the company actually has extremely talented staff developing and/or implementing notable strategies,” the letter from Greywood reads. “We believe Enthusiast should have a $1-2 billion market value, not the anemic $250-300 million market value under current management.”

Enthusiast Gaming did not immediately respond to a request for comment.

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In their letter, Greywood identifies itself as Enthusiast’s largest shareholder, having acquired approximately 9.3% of the company’s outstanding shares for more than $30 million. Greywood’s website describes the company as one that “seeks to work constructively with portfolio companies and other stakeholders to actively support and assist management in developing and realizing the full potential of the business. “.

Last fall, according to the letter, the company contacted Enthusiast to express “serious concerns” about the direction of the company; in response, the company said it received “a terse, generic, dishonest and dismissive email”.

In the first five months of 2022, Greywood has acquired increasingly large stakes in Enthusiast. In January, the company filed two documents with the Securities and Exchange Commission showing that it had acquired 7% of the total shares, then increased that stake to 8% a few weeks later. In those documents, Greywood describes himself as an investment manager for a company called Vantage Trading, which owns the vast majority of Greywood’s 9.3% stake in Enthusiast.

In the letter, the group describes an “Upgrade Enthusiast” campaign, the main pillar of which is to replace Adrian Montgomery, the company’s current CEO. Greywood also notes its intention to nominate a selection of “highly qualified and interested” candidates at a shareholder meeting in June.

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