Shares of Guild Esports (LON: GILD) are tumbling Friday morning after the company said it has terminated a 3-year sponsorship deal with a European fintech company.
Guild said it took the decision following delays in the sponsor’s launch and the payment of the contract’s sum.
The sponsor was due to begin payments from the date of their global brand launch and unveiling. However, Guild said it has not been given a timeline for the launch, and no payments under the contract have been made.
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“Given the uncertainty about the contract and the strong appetite from other brands to partner with Guild, the company has elected to terminate the contract with immediate effect to focus on new sponsorship deals that are at an advanced stage of negotiations,” stated Guild.
The company said its new business pipeline remains strong, and it continues to attract attention from consumer brands in a wide range of sectors.
Kal Hourd, CEO of Guild Esports, said: “We have been very accommodating and patient about this contract but have decided to terminate it due to increasing uncertainty over their launch plans. We are in active negotiations for new sponsorship deals and look forward to announcing these soon.”
Investors have not reacted kindly to the news, with Guild Esports shares down 7.5% at 3.98p on Friday. Last week the company’s stock price rose after it announced the creation of its sixth professional team.
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