The Party's Over

[Dan Mezick]

If you believe that stocks discount the future and that current price reflects everything known about the stock by all participants, then you have to conclude it is extremely likely the online poker party will be over soon. And, that it is going to get quite ugly.

Many of the more respected posters have said time and again the party can't last forever. That was hard to see a year back.

It may well be over if you believe the stock price action tells the truth, in issues like WPTE and Party (UK:PRTY).

These charts are just plain ugly. The short sellers are having a field day with these issues.

These equities are saying the party is over.

Party Stock (http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=UK%3APRTY&sid=0&o_symb=UK%3APR TY&freq=1&time=7)

World Poker Tour Stock (http://stockcharts.com/def/servlet/SC.web?c=wpte)

[Ed Miller]

I think trying to predict what's happening with the "online poker party" by looking at WPTE stock price is a little silly.

Obviously, I also think the premise that market price on all stocks is efficient and rational is a bunch of hooey too.

[SinCityGuy]

In early trading this morning, Party is up 7%, and Empire is up about 1.5%. It looks like they might have stabilized a bit after plummeting the past couple of days.

[wildwood]

I think the chart's are saying that poker may have peaked for now, but that is saying something quite different than the party's over. It might be useful to look at insider selling here when the lockup period ends. If the insiders are dumping stock, you have to ask what do they know that you don't know. In any case, I wouldn't be buying those ugly chart patterns.

I'm buying the [censored] out of party right now...

[wildwood]

You're obviously not a trend follower. Since you're a poker player, you should know when to fold if the trade doesn't go your way. Good luck.

[lorinda]

I know very little about share prices, but it seemed to me that originally the price went upwards based on almost nothing at all.

It really seems to me that people have just used the events of this weekend to put the price where it should have been all along.

Lori

[eastbay]

[ QUOTE ]
If you believe that stocks discount the future and that current price reflects everything known about the stock by all participants

[/ QUOTE ]

Except that "everything known" about the stock can be largely or completely off-base.

Anyone alive since 1999 should know this.

eastbay

[Voltron87]

if party is ludicrously profitable and will continue to be, and this recent consolidation helped them, if the market has been pessimistic about party and the price is relatively low how is it not a good buy? i dont know much about stocks at all but party is a great business with a very profitable outlook over the next several years. maybe not for 20 years, but still.

[Sniper]

Hey Dan...

As a comparable, Party has a huge gross margin. The selling in the poker stocks is an overreaction as a result of uncertainty.

As poker players there is noone more likely to understand the true story here.

Empire was an easy layup short on monday. Party was unclear but sold off along with the other stocks in sympathy.

As I stated in a few other threads, Party's action is clearly +EV for them, which should make it a good buy, the only question is has the excess valuation from the IPO hype been removed from the system yet.

Sportingbet came out today and said positive things about the sector, the stocks are all up today.

It was the Zoo effect... Just look at all the craziness in the Internet Gambling forum and in other threads on 2+2 in reaction to party's decision... now think of how much less info the stock analysts and shareholders had on monday.

[ QUOTE ]
As I stated in a few other threads, Party's action is clearly +EV for them, which should make it a good buy, the only question is has the excess valuation from the IPO hype been removed from the system yet.

[/ QUOTE ] Exactly. This looks like a case of two wrongs making a right. The market overvalued Party when it IPO'd, and now it's punishing Party for increasing its profits by cutting off Empire. It's not obviously over- or under-valued right now.

[Dan Mezick]

Yet, obviously in a down trend.