WPTE as an Investment?

The stock is now below it's offering price and continues to slide. No news though. Any ideas on what's happening? Experts say that the stock is now priced at it's value for the programming and merchandising, with any online business that may be coming thrown in free.

[Ed Miller]

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The stock is now below it's offering price and continues to slide. No news though. Any ideas on what's happening? Experts say that the stock is now priced at it's value for the programming and merchandising, with any online business that may be coming thrown in free.

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Instead of trusting what "experts" say (btw, I'm an expert too, and I say the stock price is headed to zero /images/graemlins/smile.gif), I think you should do your own research and decide for yourself what you think the company is worth.

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I'm an expert too, and I say the stock price is headed to zero /images/graemlins/smile.gif), I think you should do your own research and decide for yourself what you think the company is worth.

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I agree 100% about doing my own research, and I think there is more knowledge of the tournament poker industry in the membership of this site than anywhere else, especially among "experts".

But, can you give a few reasons/facts why you say the stock price is headed to zero?

[Sniper]

They haven't made any money!

They are basically a media production company with a single show!

[mrbaseball]

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They are basically a media production company with a single show!

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Only available on an obscure cable channel which most people don't even know exists.

[Ed Miller]

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But, can you give a few reasons/facts why you say the stock price is headed to zero?

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Why do you like the stock? Ignore what the analyist said. Right now the company is losing money. So if you think the stock is worth something, the burden of proof is on you.

How are they going to become profitable?

What is their long-term story? Where is their growth coming from in one, two, five years?

How are they going to remain in business once the poker shows begin to get cancelled (and they will eventually... bridge used to be on TV too)?

How do you feel about the Brunson bid in July? How do you interpret what happened?

I'm not saying WPTE is doomed. They might do well for themselves. And though I called myself an expert, I was kidding.. I'm anything but. But I think you should have solid answers to these questions that you really believe before you even CONSIDER investing in this, or any other, company.

[Matt24]

Land Lakes Gaming still owns most of WPTE dont they? I'm not sure but that is what I was thinking. Land Lakes Gaming has a lot of new things in the works including the automated Hold em table that doesnt even need a dealer and can deal tons of hands an hour. Tom Franklin talked about this to me at a tourney one time, sounded interesting.

[Ed Miller]

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Land Lakes Gaming still owns most of WPTE dont they? I'm not sure but that is what I was thinking. Land Lakes Gaming has a lot of new things in the works including the automated Hold em table that doesnt even need a dealer and can deal tons of hands an hour. Tom Franklin talked about this to me at a tourney one time, sounded interesting.

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Not that you ever claimed it did, but I want to make it crystal clear that what you've said here does nothing to answer any of the questions I raised.

[Sniper]

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Land Lakes Gaming still owns most of WPTE dont they?

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Probably worth mentioning that Lakes Entertainment, majority owner of WPTE, was delisted from the nasdaq a while back /images/graemlins/wink.gif

[Sniper]

On October 12, Steve Lipscomb, Founder, President and CEO of WPT Enterprises, Inc. (Nasdaq: WPTE - News) updated the investment community in an all- new, exclusive interview with Wall Street Network. Interview highlights include detailed discussions on the following topics:


- strategy to capture market share in international markets
- online gaming initiative
- what separates PPT from other televised poker tournaments
- forthcoming growth in the Company's consumer products division
- establishing WPT as the NFL or NBA of poker
- upcoming strategic and financial milestones

To hear the interview, visit www.wallst.net. (http://www.wallst.net.)

[DesertCat]

[ QUOTE ]
On October 12, Steve Lipscomb, Founder, President and CEO of WPT Enterprises, Inc. (Nasdaq: WPTE - News) updated the investment community in an all- new, exclusive interview with Wall Street Network. Interview highlights include detailed discussions on the following topics:


- strategy to capture market share in international markets
- online gaming initiative
- what separates PPT from other televised poker tournaments
- forthcoming growth in the Company's consumer products division
- establishing WPT as the NFL or NBA of poker
- upcoming strategic and financial milestones

To hear the interview, visit www.wallst.net. (http://www.wallst.net.)

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Did they ask him how could they have lost money the last four quarters in the middle of the biggest poker boom in history? A real company would be focused on it's core business and explaining how to fix it. In this case, it appears they know it's not fixable.

This is SOP for "concept companies". Go public on an idea that, if it works, will make huge amounts of money. When it doesn't work out, roll out multiple initiatives and talk them up to the press about all the other revenue streams you are going to create.

It keeps the bandwagon rolling for a little longer so insiders can sell their stock. Hmm, kind of like that mystery offer by Doyle did a few months ago.

I don't see anything that makes it attractive, low revenues, uncertain contract. The things I dislike the most are 1) No investor relations area of the website 2) Heavy insider selling in the spring.

Short ratio is 11%, too high for my comfort and there really are no institutional investors of any note that have this in their portfolios.

The parent company is active in financing tribal casinos, but has had compliance issues with the SEC.

[Kevmath]

http://shareholder.com/wpt/index.cfm comes up when you click on http://www.worldpokertour.com/investor/

Thanks for the links. Was able to read the 10K which I was looking for as well as any investor presentations (which I didn't see). Appears that revenue (small enough not to justify the market cap IMHO), is largely dominated by Travel Channel revenues (in the US) and they are tied in to this for 7 years total, the 4th season coming up. They are looking for international expansion to drive growth. Lakes owns 60% of stock and controls all decisions...and they have SEC problems. This does not give confidence in management either. Executive management comes mainly from a production background, not favorable in my eyes.

I recommend a pass.

[Ed Miller]

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Thanks for the links. Was able to read the 10K which I was looking for as well as any investor presentations (which I didn't see). Appears that revenue (small enough not to justify the market cap IMHO), is largely dominated by Travel Channel revenues (in the US) and they are tied in to this for 7 years total, the 4th season coming up. They are looking for international expansion to drive growth. Lakes owns 60% of stock and controls all decisions...and they have SEC problems. This does not give confidence in management either. Executive management comes mainly from a production background, not favorable in my eyes.

I recommend a pass.

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Cool. I agree. /images/graemlins/smile.gif

[Wolffink]

I had been thinking of investing in WPTE after reading the analysts column on it too...

But now...unless the stock dips a lot more, I'm going to stay away. And even if it does go lower, I'd invest in it with a queasy stomach and shaky hand.

What the others said here, is why, especially Ed Miller's first post. I may not agree with him about raising with K-J offsuit in late position after several limpers (sorry Ed, but I did learn heaps from SSHE...).

The management is under investigation. I didn't know about the Doyle Brunson bid, but after Ed Miller mentioned it, I looked it up on Google. Perhaps you can't really blame WPT managment here--perhaps they were the victims of a "pump & dump" scheme--but there was a lot of selling of stock by insiders recently. Not any buying.

The company has yet to make a profit.

That's enough to take a "wait & see" attitude.

I went to the wptonline poker game site as that's expected to generate future revenue. The thing I really don't understand is why they didn't set it up so Americans can play? I understand American companies can't setup Internet gambling. Can't they buy into a foreign company and have them set it up? Or invest a minority interest? Or license their name to someone off-shore? There's bound to be a way--I see 60 minutes reports on American firms trading with countries that are banned to US firms through an phony offshore office. Also, you'd expect a bit more buzz about their online site. They have the marketing. If they setup a good online site, open to everyone, publicize it on the TV shows, and give it an exciting bonus--people would talk about it. Hell, give initial depositors a free t-shirt and coffee mug--something many companies have done as freebies and wptonline would be doing something unique. I think it is sloppy implementation--especially if they could have setup the site to let the American market play.

[Zygote]

how come no one has even made mention of the new WPT online poker site they just opened?

The 10K mentions that they license the site from another company, so they don't actually own the entire online operation.

[Sniper]

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how come no one has even made mention of the new WPT online poker site they just opened?

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Do you know anyone that plays poker there?

[Mason Malmuth]

Hi Ed:

As you know, a number of months back I (and Mat) had breakfeast with a Barnes & Noble executive. One of the things he was interested in was our opinion of the future of poker on TV. I stated that in my opinion ESPN would swamp the Travel Channel, and while poker on TV would contintue to grow, the WPT shows might begin to do poorly. I think this is happening and agree with you that the stock may go to zero.

In a way this is a shame. I think they run the better tournaments, and have the best TV show.

best wishes,
Mason

[Mason Malmuth]

Hi Ed:

I'll add a little more. I had a very brief phone conversation a few months ago with the person in charge (and it wasn't Lipscom) before I hung on him. It had something to do with the marketing of poker books. I heard just enough to form the opinion that their book effort won't be very successful.

Now in my opinion for the WPT to become successful, their other products, and this includes their online poker room, will have to become successful. I don't see them doing much more with their TV show. But with the exception of books, I'm not knowledgeable enough to have an opinion on their other endeavors.

best wishes,
Mason