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What happened

Shares of game technology company Scientific Games Corp (NASDAQ:SGMS) fell 22.6% in August, according to data provided by S&P Global Market Intelligence, after the company reported earnings and replaced its CEO.

So what

Second quarter revenue rose 5% to $729.2 million and net loss was cut nearly in half to $51.7 million, or $0.59 per share. Both results actually surpassed the $710.2 million in revenue and $0.82 per share loss that analysts were expecting. 

The real shocker came when the company announced that CEO Gavin Isaacs will be replaced by former Norwegian Cruise Line CEO Kevin M. Sheehan. The choice was widely criticized, mainly because Sheehan has no prior experience in gaming. 

Now what

The CEO choice may be what investors focused on last month, but I'm more worried about the $8.1 billion in debt. After going on a massive buying spree the last few years, Scientific Games is left with a stretched balance sheet and a very slow growth rate for a company hoping to improve its financials quickly. The loss and the debt are enough to keep me out of shares, and hiring a cruise line CEO to run the company just seals the deal.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.