[Sniper]

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Having 50% operating margins doesnt mean much if your core business(poker)see a 50%-75%drop in revenues.


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Don't forget that the majority of expenses are directly tied to revenue... if poker revenue dropped 50%, related expenses are also likely to drop almost 50% as well.

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I think you are overestimating the value of Dice Casino and Noble Poker.

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Empire 3rd Qtr Actuals:
Rev = 31.4m (Poker = 23, Casino = 8.4)
Profit = 16.1m

Empire 4th Qtr outlook (Goodguy scenario - 50% drop in poker rev):
Rev = 19.9m (11.5+8.4)
Profit = 9m (using 50% of 75% attributed poker expenses reduction)

My feeling is that 50% reduction is too much, as they continue to add new players to replace old players leaving. I believe empire guided about 10% lower. (if my currency conversion math is right, the consensus analyst estimate for 2006 rev is $140m)

For another thought on looking at the company, consider that its really just a Super Affiliate with only 40 employees [img]/images/graemlins/wink.gif[/img]