The monthly dividend was payable in December. However, EEG said its board has now confirmed this will be suspended.
The business paid the monthly dividend for November 2023, as announced last month. In line with Series A preferred stock terms, unpaid dividends will continue to be accrued.
EEG chief executive Alex Igelman said the suspension will free up more capital for EEG to reinvest in the business. He added that this would create greater value for shareholders in the long run.
“We are temporarily suspending the dividend on our 10% Series A cumulative redeemable convertible preferred stock, as we believe we can effectively reinvest the capital in the business in order to drive the greatest return on capital for shareholders,” Igelman said.
“This is an exciting time for EEG, as we execute on our turnaround strategy and position the company for long-term success.
“Management and the board of directors will continue to monitor the financial performance of the company to determine the appropriate time to reinstate the dividend.”
Revenue drops 71.9% in Q1 at Esports Entertainment
The suspension comes on the back of a tricky Q1 for EEG. Last month, the business reported a 71.9% fall in revenue to $2.7m (£2.2m/€2.5m) in Q1 after the sale of its Bethard business earlier in the year.
The group agreed to sell the Bethard online casino and sportsbook business in February for €9.5m. The sale completed later in the same month with EEG offloading the business in full.
EEG also noted the winding down and liquidation of Argyll entities. Revenue-producing operations ceased in December, with this impacting on year-on-year comparisons.
The sale and winding down meant costs were lower, but net loss still widened from $4.2m to $4.8m. However, adjusted EBITDA loss improved from $1.0m to $354,870.
CEO Igelman said he remains positive about long-term growth plans. He pointed to the recent deal to acquire a 30% minority interest in esports content producer Drafted.gg, saying this will further support long-term ambitions.
Original article: https://igamingbusiness.com/esports/esports-entertainment-suspends-monthly-dividend/
