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Copyright 2005 The Liverpool Daily Post
& Echo Ltd
Daily Post (Liverpool)
July 1, 2005, Friday
HEADLINE: INVESTORS TURN ONLINE
POKER FIRM INTO RETAIL GIANT
BODY:
RETAIL investors showed a willingness to gamble on the fortunes
of PartyGaming yesterday as the value of the online poker firm
hit £5.7bn.
On the first day of full trading, PartyGaming shares rose more
than 2% or 3.5p to 142.5p - well above the price of 116p at the
time of its initial public offering on Monday.
It means PartyGaming is now on a par with retail giants such
as Marks & Spencer and B&Q owner Kingfisher in terms of
market value.
When conditional dealings began in its shares earlier this week,
the company was already worth more than well-known firms such
as British Airways, Dixons and Boots.
The rise in the share price suggests investors have overcome
concerns over the legality of online poker in the United States
where PartyGaming generates 90% of its revenues. Some analysts
fear the introduction of legislation in the US that will prohibit
online gambling.
Other threats to the company come from intensifying competition
which could weaken margins or the potential for online
poker to be a short-term fad.
But the Gibraltar-based company has countered this by pointing
out that case law in the US indicates only sports betting is prohibited
and not online poker.
PartyGaming owns the PartyPoker brand and its online
poker gaming room has attracted more than one million users
since 2001. Customers pay a type of commission known as rake to
play against each other.
Online poker generated about $ 553m (£305m) or 92% of PartyGaming's
revenue in 2004, helping it to notch up annual pre-tax profits
of $ 371.7 (£204.6m) against $ 89.2m (£49.1m) last
time
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