PartyGaming as an investment - Quick thoughts

Sniper · #1 10-09-2005, 02:08 PM

Why Party may be a good buy now?... because it may take the analysts some time to figure out what we already know, that Party's action this weekend is +EV for them. (ie the company is good)

Why Party may not be a good buy now?... bacause the stock may still be over priced. (ie the stock is bad) [Maybe one of the fundies in here will run an analysis on the numbers]

Sniper · #2 10-10-2005, 03:50 AM

They don't even know what the real news is!

From the financial times in london this morning...

On the downside, Partygaming lost further ground with a 1.3 per cent decline to 79p after investors seemed unimpressed with news of a single account system for its 9 million customers.

Sniper · #3 10-10-2005, 03:56 AM

Empire down about 12% out defending its stock...

LONDON (MarketWatch) -- Empire Online (UK:EOL) , a network and marketing services company for the online gaming industry, said Monday that third-quarter trading has been very strong, with net gaming revenue up 71% compared to a year ago, at $31.4 million. Poker operations accounted for $23.0 million of the revenue, while casinos accounted for $8.4 million of revenue.

Sniper · #4 10-10-2005, 04:02 AM

And Reuters thoughts...

On the downside, PartyGaming (PRTY.L: Quote, Profile, Research) shed 2.2 percent after the Chief Executive of Empire Online (EOL.L: Quote, Profile, Research) warned on Monday that the overall online gaming market showed virtually no growth during the third quarter on 2005.

Sniper · #5 10-10-2005, 04:30 AM

And more spin control...

Empire defies fears of internet poker slowdown
By Tom Griggs FT.com, 08:15 BST Oct 10, 2005

The slowdown of growth in internet poker does not appear to have affected Empire Online which said that revenues jumped 71 per cent in the third quarter.

Although investors continued to treat the sector with caution following the warning from PartyGaming over growth prospects and the flat listing by 888.com in Spetember, as Empire shares fell 13.66 per cent in early trading to 158p.

The online poker group said in a trading statement on Monday that the number of real money players increased 62 per cent to 53,148 compared to last year, a jump of 24 per cent compared to the second quarter. Net revenues from gaming leapt from $18.3m in the third quarter last year to $31.4m in the same quarter this year, and 24 per cent compared to the previous quarter.

Empire, which ended talks over a £791m takeover by Sportingbet at the end of September, estimated that operating profits for the quarter would be $16.1m, a rise of 43 per cent compared to $11.3m last year. It said that over 40 per cent of the new real money players had come through its own platforms, Noble Poker and Club Dice, which it acquired over the summer.

"We are delighted in our strong trading and the strategic advances we have made during the third quarter," said Noam Lanir, chief executive. "In a period where there has been much uncertainty over potential growth rates in the online gaming industry as a whole we believe our results demonstrate the strength of our core marketing skills."

Last month, PartyGaming, the world's largest internet gambling group, saw its shares fall by a third when it said that customer growth had slowed while player retention rates and player yields had declined at rates "greater than expected", prompting fears that the online poker fad had come to an end.

However, analysts at Altium Securities, said that Empire's results demonstrated that "the majority of Party Gaming's woes are company specific".

Mr Lanir attributed Empire's success to its diversification strategy of directing new players to its own platforms, such as Noble Poker, and away from so-called "skins" such as EmpirePoker.com which uses PartyGaming technology.

In a separate announcement, PartyGaming said on Monday that it had changed its operating platform and would separate its own players from those from other companies, such as Empire, using skins. The new system will allow its customers to play a range of different games in addition to poker on the same platform, and to make side bets and deals in poker tournaments.

The change was welcomed by Empire which said that its EmpireOnline.com skin would be enhanced by the inclusion of beginners' tables with low buy in costs, as well as tables with bet limits of $100/$200.

goodguy_1 · #6 10-10-2005, 04:39 AM

yea good find FT.com rules..I was looking for the Empire press release NOT Party press release.

Does Empire Online have an Invesors Relations url?..tried to goggle it real fast and could'nt find it.

Sniper · #7 10-10-2005, 05:03 AM

Probably worth noting that SportingBet (SBT.L) is also taking a nice hit so far today down about 6%.

SinCityGuy · #8 10-10-2005, 05:48 AM

[ QUOTE ]
The change was welcomed by Empire which said that its EmpireOnline.com skin would be enhanced by the inclusion of beginners' tables with low buy in costs, as well as tables with bet limits of $100/$200.

[/ QUOTE ]

LoveDub · #9 10-10-2005, 06:20 AM

This was released on 10th October, which is today. There is no mention of the split with Party, and their figures all seem to be quoting player numbers as if they were still with Party.

What gives?

Sniper · #10 10-10-2005, 07:58 AM

Reuters update...

LONDON, Oct 10 (Reuters) - Growth prospects in online poker came under fresh scrutiny on Monday as Empire Online (EOL.L: Quote, Profile, Research) said the market was almost flat in the third quarter, pummelling its shares and those of rivals Sportingbet and PartyGaming.

"I don't think the market went up much in this period," Empire's Chief Executive Noam Lanir told Reuters after the firm reported a 24 percent increase in new players and revenues between its second and third quarters.

"We're much ahead of the market," he said. "From what I'm hearing, the overall market was more like flattish."

But Empire's shares were down 24 percent at 139 pence by 1006 GMT due to signs of increased competition after PartyGaming (PRTY.L: Quote, Profile, Research) said it was separating its own poker players from those directed to its site by partners such as Empire.

"Statements from PartyGaming and Empire Online contain the initial seeds of divorce," said Charles Wilson at Bridgewell Securities.

PartyGaming's shares were down 7.5 percent at 74 pence by 1006 GMT, the biggest fall on the FTSE 100 index .

"This is an all-time low for PartyGaming," said analyst Robin Chhabra at Evolution Securities. "They've never been in the seventies before."

STILL TOGETHER

The unease spread throughout the sector and even Sportingbet (SBT.L: Quote, Profile, Research) , the owner of the Paradise Poker Web site which is expected to report strong trading on Wednesday, fell 3.1 percent to 297 pence by 1006 GMT.

Empire and PartyGaming have always been strongly intertwined, with Empire Online's EmpirePoker Web site driving customers to PartGaming's software platform.

But recently Empire bought online gamer Noble Poker and it has started moving its customers across from the PartyGaming software platform to Noble Poker's Playtech system.

PartyGaming said on Monday it had built new software platforms and would now separate its own players from those entering via "skin sites" such as EmpirePoker and Coral Eurobet.

But it reiterated its commitment to them.

"It's not news there's a lot of competition out there," PartyGaming's John Shepherd told Reuters. "But we're still supportive of our skins. We've improved their platform as well as our own."

Charles Wilson at Bridgewell said the skins would lose out most from any split from PartyGaming and this was what hit Empire's shares.

"In essence, today PartyGaming has taken steps to distance itself from its skins," he said in a research note.

"We believe the skins customers will be disadvantaged, as they will not have access to PartyGaming's player liquidity," he added. "Player liquidity is one of the key customer drivers."

Lanir said smart marketing had helped the group pull in more players than its rivals, while the launch of PartyGaming's new software platform showed it was concerned about Empire's success.

"They're showing their concerns about our dramatic growth compared to them and the entire industry," said Lanir.

Empire Online said the number of new players reached 53,148 for the third quarter, an increase of 62 percent over the same period last year and 24 percent over the second quarter.

Net gaming revenues rose to $31.4 million, up 24 percent on the second quarter and 71 percent on the third quarter of 2004.