View Full Version : Any thoughts on WPTE?

02-03-2005, 02:50 PM
World Poker Tour announced they will be running an online poker site starting this year and the stock is up 2 points today.

02-03-2005, 04:15 PM
That "news" has been on their website for months now.

It's up 18% today on that press release! Look at all the suckers rushing in to buy that crap right before the expiration of the IPO lockup period! LOL!

02-03-2005, 09:38 PM
are they still going to let other sites advertise on their station? alot of fish will associate what looks liek an american company as safer, ie, not cheating, and might switch from party.

02-04-2005, 12:03 AM
are they still going to let other sites advertise on their station? alot of fish will associate what looks liek an american company as safer, ie, not cheating, and might switch from party.

[/ QUOTE ]

My understanding is that it is illegal to operate an online cardroom on American shores. The site is going to be operated in the UK and will only be marketed in coutries where online gambling is officially legal. The press release explicitly states that they will not do business with American customers. If this is the case, I think traffic will be a serious issue. Who wants to play in an empty cardroom? Not that the world really needed another online casino anyway...

If I am mistaken, then this could indeed be a very profitble endeavor.

Stock Whiz
02-10-2005, 12:53 PM
WPTE is a strong buy for me. Earnings are growing at a rapid pace and management is exploring different ventures to increase brand name and earnings.

WPT is on cell phones, lottery tickets, and they just started a boot camp. Their online gaming website will be a monster success oversees just by the ability to offer satelites to their WPT tournaments.

Peter Lynch in his book, "Beating the Street" always stressed buy what you know. And we all know poker is growing like no one has ever seen before. Everyone watches the WPT on the Travel channel and who doesn't play in some sort of Hold'em tournaments for fun or to make money.

With volume averaging 250,000 shares, when the institutions arrive shortly, the price should sky rocket.

Any other thoughts? I am thinking about going all-in.

02-10-2005, 02:36 PM
Investing is always a tricky and sometimes things that are obvious are anything but and vice versa.

It would be interesting to see the thoughts of the hierarchy of this board and whether they will personally be investing in this...

Mason? David?

Barron Vangor Toth
www.BarronVangorToth.com (http://www.BarronVangorToth.com)

02-10-2005, 03:19 PM
Boy, that's one jumpy looking stock.

Yeah, it's up gangbusters in February, but so far, it hasn't made up for its big January drop. And their P/E is frighteningly high.

Yeah, the general trend in their very short history is up, but it's like trying to characterize your win rate after a couple thousand hands - not enough data.

02-10-2005, 06:27 PM
Agreed. I'm certainly going to keep an eye on it but I am cautious (perhaps overly so, I'm not sure) when it comes to financial investing. Granted, I might be missing out on some "can't miss sure thing" but, at the moment, I'm fine with that.

Hopefully this won't be another "one of those" stocks that I'm kicking myself about two years from now where I go to parties and people talk about how they invested in Obvious Company X before it was Obvious Company X and, hey, did you notice the new Mercedes outside?

Barron Vangor Toth
www.BarronVangorToth.com (http://www.BarronVangorToth.com)
'o4 Mercedes > 'o4 Buick Century

Stock Whiz
02-10-2005, 07:26 PM
I got in today at $16.50. Closed at $17.50. Earnings are coming out next week so I expect to see another bounce. Yes, I do think it will be another can't miss stock. Again, who do you know that doesn't play poker? P/E is high realtive to current earnings, but it is low compared to future earnings. Between the television rights, online website, and their other endeavors, their earnings should drive the price up.

02-10-2005, 09:36 PM
Anyone notice that Stock Whiz has 3 posts and they are all touting WPTE? Does anyone think this guy has a big bet riding on this stock?

02-11-2005, 12:50 AM
I think that this stock is way overrated for two main reasons.

1) I believe that their poker site will have nowhere near the success that is predicted for it, because Party is such a ridiculous giant. Look at Full Tilt and Poker Mountain, for instance. Full Tilt has really tried all it can to get publicity and attract a customer base - but it hasn't been able to do so. Why? Because Party is so much...well, easier. Because of the fact that they have such a massive customer base, their games are more beatable, and you can find a game at any limit you want to play. You also get massive tournament prizepools that sites other than PokerStars simply can't compete with. And really, there's not many advantages that Full Tilt has over Party, other than the gimmicky "play with the pros" and the arguably nicer interface (I don't think it's that great.)

But anyway, the point is that WPT is really late in entering the online poker market, and they are going to have a lot of trouble getting off the ground, if Full Tilt, ZeroRake, and Poker Mountain are any indication.

2) The second main problem is the fact that their television program is a) so easily copied and b) on a network no one watches. Though it was the first show on the scene, it's going to have a lot of trouble fending off the competition from FSN and ESPN, even with the brand name recognition.

I would stay away from this stock, personally...but if and when PartyPoker has its IPO, I'd go after that.


02-11-2005, 07:39 PM
For you guys that dont think this stock is not going to rocket you are smoking crack or dont have a clue on the stock market. Eveybody is playing poker. You cant walk into a casino and get on a table in less than a hour in most places. I pratice what I preach I just bought a [censored] load of shares, hopefully the brothers here will join me and we all can celebrate in vegas with big boob hookers when we strike it rich.
Everest1 /images/graemlins/spade.gif

02-12-2005, 04:19 PM

02-12-2005, 07:55 PM
I just pitched mine. $19.39. I got in for $10.00 so I'm happy.

My view is, until the P/E ratio gets better this is a bubble, and there are definitely stronger stocks to be had than this.

02-12-2005, 07:57 PM
Looks like some solid and thoughtful analysis.

Stock Whiz
02-13-2005, 10:17 PM
No hidden agendas - I am all-in WPTE for 3 stacks of high society. Now, here is my take on future P/E and price potential:

If they can generate roughly 10% of party poker business - approx. $50M, here is a rough calculation of future price relative to a P/E of 40 (average for growth stocks)

(Earnings) 50M/20M (shares outstanding) = 2.5 Earnings per shares

P/E of 40 would approximate a price of $100

100/2.5 = 40 PE

Any questions as to why I am all-in?

Do the figures with 20 or 30% of Party's earnings.....the payoff if outrageous.

02-14-2005, 02:15 AM
Interesting, but I'm not sold they can do 10% of PP's business.

I just looked at Pokerpulse and PP has 31K players right now between ring and tourneys. I'd guess about 2/3 of that is actually on PP and 1/3 is on skins... so we'll say Party has 21K right now.

The biggest recent launch has been FTP. Right now they are at about 2.2K players... about 10% of Party's earnings. HOWEVER, keep in mind the WPT site isn't open to American players. I'd estimate 70% of online players I play with are from USA, and this is probably conservative. So, barring some miracle, WPT is looking at about 30% of 2.2K, or 660 players.

Right now, we see that WPT is looking at 3.1% of Party's action (660/21K). But it gets worse...

Party gets revenue from those 10K players playing on its skins. In fact, I think I saw here that they take a 70% cut. Therefore, they are in effect receiving the action of about 28K worth of players--do you see why?

660/28K = 2.4% of Party's action
This gives us revenue of about $11.7M by your calculations.
11.7/20 = $.589 earnings per share
With 40 P/E, we're looking at a target price of $23.57.

Still a small gain...BUT, this assumes that in foreign markets, WPT does as well as FTP, and the way FTP was hyped this is by no means certain. Also, we're assuming continued prominence of online poker, which is also not a certainty. Also keep in mind my "70% domestic players" figure was as conservative as Regis Philbin's taste in ties... bump that up even just to 75 or 80 and it starts getting ugly.

At $19.39 I was happy to sell it and cash in my gains. I'd play it safe with this and any poker stock other than Party right now.

02-14-2005, 02:18 AM
I'll admit, this thought has crossed my mind as well.

Stock Whiz
02-14-2005, 09:44 AM
31,000 players on PP????.....at most times of the day there are over 65,000 players. Also, the shorts are getting squeezed here. The price will hit $25 within 2 weeks.


02-14-2005, 02:01 PM
Well, I gotta say this:

If I were looking to generate some short term buzz, for oh, I don't know, a pump & dump, trying to talk everyone into buying the stock would be just what I'd try.

On the other hand, if I were just in it for a longer term investment, I really don't see the need to go getting religious about the stock.

Sure, maybe it'll be $25 in two weeks. Could even hit that in two days or less. That still bypasses the question of whether it's a good medium to long term investment, or for that matter, whether one would be able to get one's money out of it before the next downturn.

02-14-2005, 05:11 PM
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?

02-14-2005, 06:06 PM
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.

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.

02-14-2005, 11:41 PM
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.

02-15-2005, 01:36 AM
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?

02-15-2005, 01:45 AM
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.

02-15-2005, 02:14 AM
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!

02-15-2005, 02:45 AM
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...

02-15-2005, 06:30 PM
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?

02-15-2005, 10:49 PM
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
02-16-2005, 11:10 AM

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

02-16-2005, 03:47 PM
Their stockscouter also gave it a "3" rating (scale from 1 to 10). A "3" is very low.

02-19-2005, 04:52 PM
Hey dude you better go vote "YES" in my poll.

Poll (http://forumserver.twoplustwo.com/showflat.php?Cat=&Number=1730329&page=0&view=colla psed&sb=5&o=&fpart=1#Post1730329)

Sorry, but not allowing U.S. players is going to be the death of the site. It's hard enough getting a site up and running when you allow U.S. players.

02-20-2005, 12:41 AM
the only only posotive that might come of no US players to start is they focus in China. Gte a base of players then become the monopoly there. They got [censored] tons of people. Other companies have a nice base here so they don't look anywheer else. I just don't know if Chinese dudes play poka like we do. I think they liek that paigow