Drop in Caesars' revenue could lead to Frissora's ouster
Since the beginning of the year, Caesars Entertainment has seen its stock prices drop 17%. Several of the casino operator's minority shareholders, including at least three hedge funds, are placing the blame squarely on CEO Mark Frissora, and could be looking to push him out.
This week, minority shareholder HG Vora Capital, one of the hedge funds, increased its stake int he company to 4.9%. It is actively pursuing changes in the company, alongside hedge funds TPG Capital and Apollo Global Management, both of which also own a significant stake in Caesars. TPG and Apollo were partly responsible for bringing Frissora, the former CEO of Hertz, onboard, but the financial situation at the company this year is making everyone have a change of heart.
In general, the casino market has been on an upswing. However, Caesars is still reeling from its emergence from Chapter 11 bankruptcy from last year. Now, stockholders could be looking to bring new blood into the company and try to help turn it around.
Frissora has made some questionable decisions this year. It recently spent $1.7 billion - in cash - to acquire Centaur Gaming's Hoosier Park and Indiana Grand racinos in Indiana, a move that many said was way overpriced. Plans to expand into Dubai, Mexico and, possibly, Macau have also been met with a great deal of criticism.
Frissora was successful at Hertz during the seven years he ran the company. However, he was ousted in the end after revelations of "accounting mistakes and internal control issues." He has no gaming industry experience and the decline in financial stability could lead to his removal when his contract expires next February.