The largest shareholder in Enthusiast Gaming, the holding company of Luminosity, the Vancouver Titans, and the Seattle Surge, has penned an open letter to the company in which it called for the removal of Enthusiast’s CEO and most of its board of directors.
Greywood Investments and its associates and affiliates, which owns 9.3 percent of Enthusiast, created a website today called “Upgrade EGLX,” referencing the company’s ticker symbol on the Toronto Stock Exchange and Nasdaq, and posted a letter addressed to Enthusiast and its seven-person board of directors. In the letter, Greywood said that “under current leadership, [Enthusiast’s] potential is being squandered.”
Specifically, Greywood called for the ousting of CEO Adrian Montgomery, who Greywood called “a detriment to the Company’s management, operations, communications, and growth strategies.” Greywood also claimed Montgomery has developed a “culture of divisiveness” within the workplace, has not consulted with various employees and shareholders about partnerships and acquisitions, and is overcompensated.
The shareholders also took aim at the company’s board of directors, which includes the likes of NFL player Richard Sherman and Vancouver Canucks chairman Francesco Aquilini. Among its chief complaints is the board’s perceived “lack of economic interest” in Enthusiast, of which the board members collectively own 5.7 percent of the company’s common shares.
In addition to overseeing Montgomery’s allegedly divisive workplace culture, Greywood admonished the board for a lack of transparency and “alleged impropriety.”
“We believe that the Board has failed to provide proper oversight or handling of certain conflict situations or reported incidents,” Greywood said. “This raises serious questions regarding the Board’s judgment, which we think has unwittingly fostered what we understand to be an unhealthy and harmful culture. This, we believe, has resulted in the Company having significant difficulty recruiting and retaining appropriate individuals in leadership roles (particularly women).”
As a result of this and other complaints, Greywood will be focusing its campaign to “upgrade” Enthusiast on replacing most of the board of directors with those who have more knowledge of the industry or financial stake in the company. Additionally, the shareholders want Montgomery replaced immediately and the company to operate more in U.S. “gaming/technology/capital centers,” such as Los Angeles and New York.
In March, Enthusiast laid off most of its editorial staff at Upcomer amid a pivot to video. This move came just more than a year after Enthusiast launched the esports publication. Later in the month, Enthusiast reported a loss of $41.6 million in 2021, nearly double the losses it reported in 2020.
