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What: Shares of Isle of Capri Casinos (NASDAQ:ISLE) hit a cold streak on Friday, falling 14% after the company announced a surprise management change last night.
So what: The casino chain said it eliminated the executive chairman position held by Jim Perry and named current vice chairman Robert Goldstein (non-executive) chairman of the board. It also removed the position of the position of chief strategic officer and moved current CSO Eric Hausler to chief financial officer. CEO Virginia McDowell explained the move as an effort to "streamline our business and look for more efficient ways to operate our business." The company also eliminated several other senior positions, saving the company $2.5 million a year.
Now what: The stock seemed to sell off because investors believe the management shift doused the likelihood that Isle of Capri will get acquired. The regional gaming company has underperformed the industry in recent years as competition has stepped up, with more states legalizing gambling. Gaming and Leisure Properties was rumored to be interested in purchasing Isle of Capri's 15 properties, but the management shakeup may have cooled off the deal, as it's odd to see major changes in leadership ahead of M&A activity. Before Friday's news, shares of Isle of Capri had jumped more than 50% since mid-June on rumors of a buyout.
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