Online poker sites are ubiquitous. From the large PokerStars to the small Titan Poker, there's a site out there for every player. By sending players to major tournaments and sponsoring their own major tournaments, the sites have gained legitimacy.
In July, Partygaming.com, owner of the PartyPoker site, went public on the London Stock Exchange. (Regulatory issues prevent US citizens from trading the stock.) Three months later, on September 7, the CEO issued this statement:
"While the online gaming market and poker in particular continues to show strong year-on-year growth, the rate of growth is continuing to moderate," said Richard Segal, chief executive of PartyGaming.com in a statement. "As it does so, the Group will continue to adapt its marketing strategy and infrastructure to provide greater focus on customer retention and player value."
Profits were up — an 81 percent increase in half-year revenues.
The market response: a 33% drop in share price merely because "the rate of growth is continuing to moderate." While the stock price has stabilized some in recent weeks, even climbing 1.5% yesterday, it is still well below those pre-announcement levels.
In the wake of this, another online complany, 888 Holdings, which owns Casino-on-Net.com, ReefClubCasino.com, and Pacific Poker is continuing with its IPO, expected to start trading on October 3, 2005 (also in London.)
A week after the Partygaming announcement, the IPO which had originally expected to be valued at 825-875 mln stg (about $1.5 million USD) was now valued at 750 mln stg (about $1.3 billion USD). It might have slipped further but the owners refused to go forward without the 750 mln stg as a floor. That refusal didn't last long though because, as of today, the market capitalization was down to GBP630.4M (about $1.1 billion USD), and "going well."
Article comments
1 - Justene
Thanks to Aaman for the conversion of the prices into US dollars.