Any thoughts on WPTE?

[JoeC]

That's what I got off of Pokerpulse, yes.

EDIT: Actually, the actual figures don't matter. All that matters is the ratio of FTP to Party players. Do you see why?

[laserboy]

Why are you so confident that WPT Online will be successful? Do you even play online poker? There are dozens of online poker sites out there and all of them allow action from US players, who make up the vast majority of the online poker market.

From my perspective, online poker is a commodity business. The software and "branding" are nice, but I play where I can get action. There is little allure in playing on a site with poor game selection and shorthanded tables. Why do you think Party Poker is the most successful site with their crappy software? JoeC makes a good comparison with Full Tilt, which is my opinion has superior software and had tons of marketing hype yet does not draw nearly the traffic that Party does.

Furthermore WPTE isn't even running the site. Wagerworks is. WPTE is just licensing their name to it for a cut of the profits.

From a valuation standpoint, Cryptologic is valued at much less and it has access to many times as many players as WPT Online will. AND it is not chopping profits with another company.


[ QUOTE ]
P/E of 40 would approximate a price of $100

100/2.5 = 40 PE

Any questions as to why I am all-in?


[/ QUOTE ]

A P/E ratio of 40 is astronomically high. You can get about the same return on investment on an ING Direct savings account. I wouldn't touch a stock with a P/E ratio of 40 with a ten foot pole. If you are riding the hype in hopes of unloading it on a "greater fool", then that is one thing. But trying to argue its current price from a valuation is absurd.

[JoeC]

Great argument... I didn't even think to point out that his 40 P/E is a bad stat.

"Greater fool" is the real reason I bought the stock, and I can't possibly imagine a bigger fool than whoever bought mine for 19.39.

[DesertCat]

Are trying to say that WPTE's business model doesn't work now, but you are really hopeful a hail mary play of entering a new business will save them?

[toots]

[ QUOTE ]
Great argument... I didn't even think to point out that his 40 P/E is a bad stat.

"Greater fool" is the real reason I bought the stock, and I can't possibly imagine a bigger fool than whoever bought mine for 19.39.

[/ QUOTE ]

I'm glad it isn't just me.

Yeah, P/E of 40 is higher than I'd want to play with, too.

[laserboy]

The funny thing is that the 40x figure is from the best case scenario for future earnings. They haven't reported their fourth quarter earnings yet, but the real figure for the actual 2004 will be closer to 100x!

[laserboy]

I just took a look at closer look at Cryptologic's numbers... They are making about 13M/year. Yet according to Pokerpulse, they generate twice the peak usage that Full Tilt does. Even after all of Full Tilt's WSOP marketing blitz and 100% bonuses, they are only doing a fraction of 13M/year.

How much will WPT Online generate if they are effectively shutting out 80% of the online poker population and are chopping the proceeds with WagerWorks? It kind of makes "Stock Whiz's" 50M/year prediction look a little bit silly...

[JoeC]

Great points there... also the guy who mentioned the "hail mary" knows his stuff too.

You guys seem to know a good deal about the market so maybe you could help me with this one.... what do I do with the money I just took out of WPTE?

[steveyz]

I don't think going all-in on any stock is a sound investment strategy. I bought some WPTE a few months ago at 9.50, but it represents less than 5% of my holdings. When I bought it, I looked at it as a highly volatile speculative stock that was pretty much like rolling a dice. I'm happy that it's done so well, but I would be hesistant buying too much at current levels.

[Stock Whiz]

http://moneycentral.msn.com/investor...sp?Symbol=wpte

I guess I am not the only "fool" who thinks this stock will skyrocket. MSN's price target is $59.38.