Exclusive: Fidelity sells down Playtech stake to below 5% after earnings miss

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LeapRate Exclusive… LeapRate has learned via regulatory filings that Boston based investment management giant Fidelity Investments, through its FMR LLC subsidiary, has recently sold down some of its stake in online gaming and financial trading provider Playtech PLC (LON:PTEC).

Fidelity was one of Playtech’s largest shareholders with a 5.06% interest in the company, worth about £82 million (USD $107 million). Fidelity’s filings indicate that the stake was sold down to below 5%, without giving specific details.

The filings indicate that the share sale was carried out late last week, on July 13. Earlier this month Playtech had issued a first half 2018 Trading Update indicating a significant slowdown in its gaming business, particularly in Asia, due to what the company termed an “aggressive pricing environment from new entrants to the market”. The Trading Update sent Playtech stock tumbling by 26% that day. Playtech shares have continued downward by about another 10% since, and are sitting near a 52-week low at just above £5 – in fact the lowest they have been since early 2013.

A bright spot in Playtech’s first half was its financials division, TradeTech. The company had stated that TradeTech had a good start to 2018, with the B2B division delivering a strong performance in line with management’s strategy. Playtech recently hired well-known FX industry executive Joe Rundle to run its financials B2C unit Markets.com.

Playtech was for a long time effectively controlled by founder Teddy Sagi. However Mr. Sagi has been diversifying his investments of late, selling down his stake in Playtech to below 10% in mid 2017. Three of Playtech’s four largest shareholders are now institutions including household financial names T. Rowe Price – now Playtech’s largest shareholder at 10.2%, Morgan Stanley (NYSE:MS) with a 5.8% holding, and Paris based asset manager Boussard & Gavaudan which acquired 13 million Playtech shares from Teddy Sagi’s Brickington holding company in March 2017 for a 4% holding.

Interestingly, Bloomberg reported last week that a mystery investor had sold about $160 million worth of Playtech stock in mid June, about two weeks before the earnings warning was issued by the company. According to Bloomberg, Goldman Sachs’s trading desk began to market the stake on June 14, and the seller was a US hedge fund.

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