Shares in GVC plunged 18 per cent this morning as chief executive Kenneth Alexander and chairman Lee Feldman offloaded the majority of their holdings in the online gambling company.
Alexander sold £13.7m of stock and Feldman sold £6m of his holding, prompting other investors to dump their shares despite assurances that the pair will not reduce their stakes further.
In a statement to the market Alexander insisted he would stay with the company for the “long term” to complete a three-year strategy.
Russ Mould, investment director at AJ Bell said: “The two directors have pledged not to sell any more while they ‘continue’ at GVC. Investors may have read that statement as implying the pair aren’t going to be around that long.
“Mr Alexander reassures that he is ‘here for the long term’ because his current plan will take at least three years to accomplish. The market is clearly confused as to why the pair have decided to sell down now if there is still value to be created.”
The plunge in share value could also be blamed on fears over tightening regulation, as shares in William Hill and Paddy Power Betfair also slid more than three per cent.
Ian Forrest, investment research analyst at The Share Centre, said: “Shares in GVC, the owner of Ladbrokes, fell sharply today alongside those of other large betting groups such as William Hill and Paddy Power Betfair.
“The slide began yesterday when there were reports that the government might introduce a further tightening of regulations on the sector in the Spring Statement next week. The sector is still seeing the effects of the recent government decision to impose a big drop in the maximum stake for fixed odds betting terminals.”