Re: SEC probes Doyle
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Part of the answer may lie in why the stock was worth 18 before the bid but 6 after. Was somebody accumulating prior?
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I can shed a little light on the 18 before, 6 after (of course all opinions but I followed the stock heavily until a month ago or so). First of all, the company was overvalued at 18, but there were a lot of people who were buying into the popularity of poker and saw this as a juggernaut that was going to be the king of poker. There was talk of a new wpte casino website. There was talk of them restructuring their deal with the Travel Channel. There was talk of a new poker show: Professional Poker Tour. The big one really though was the money they were going to rake in on that website. Also, they have the wpt brand with cards, poker sets, table tops, videos and the like.
After the offer fell through, people were not willing to speculate so much on the popularity aspect and were looking at income sheets. WPTE lost their auditors less than a month before quarterly reports were due. The auditing company said that the WPT casino was a gray area legally that they weren't comfortable with, the risk was not worth what they would get financially to be associated with WPTE. When you get dumped by your auditing company, it looks really bad and is usually a bad sign of things to come. LACO, their parent company was delisted for not having paperwork in on time (I think they also had auditor problems but I can't remember for sure). Then WPTE announced they were nearing a deal for broadcasting rights of the Professional Poker Tour, but then it fell through. Their attempt at working a new deal with the Travel Channel was not going well. The new website came out, but appeared to not be heavily advertised or announced with any fanfare. Only a few hundred people were on at peak hours and most of them were at free tables. Then it was frequently buggy and was either shut down, or only the few pay tables were up. The english used in the 'sorry we are not working' announcment on the site looked like it was written by a third grader. People lost confidence that a site that could not allow americans on the pay tables, and a site that used the British pound instead of the EU dollar was not going to get enough players to be successful.
You add all this together and you can see how shareholders became very cautious and that pushed the price down. The catalyst that got the ball rolling down the hill though was the Doyle bid.
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